35% down to buy an investment property?!

I talked to a banker about a week ago. He wants 35% for an investment property.

Now, wait a minute. What about no-money or low-money down startegies?

As far as I know they don’t exist in the spring of 2012 in USA.

Or maybe they do, but I don’t know about them.

Now, the good thing is this.

Have you ever heard about the Law Of Entry?

It states: If the entry to any business or investment is easy, anybody and their dog will be there.

So the good thing is, higher down-payments will weed-out a lot of competitors.

Means more deals for the smartest and strongest.

What’s new?

The Law Of Entry never fails. I’m glad it’s not easy. If it was easy, assets would not have any value:)

Would you like for things in life to be easy or hard?

2 Comments on 35% down to buy an investment property?!

  1. Hi Derek,
    Although I understand and agree with your point that difficulty can be an advantage, the idea that a higher down payment is required for an investment property (35% ) versus a person’s primary residence ( only 10% down) makes no sense to me. In an investment property, you are earning $ on the property, thus in a better position to repay. In your primary residence, your income can be from anything, so it could be an even greater speculation regarding your future ability to repay. Crazy!

  2. Hi Carolyn,
    Thank you for your comment. You’ve hit the nail in the head. It doesn’t make sense to me for the same reason. I could talk about the crazy & illogical rules of lending for hours. I was just trying to find a positive in this craziness and I found it.
    I am also aware of other ways to buy an investment property like owner-financing for example but I have never tried yet.
    The Law of Entry is absolute however and always works. And I can’t argue with lenders, because, as the old saying goes, who has money, makes the rules.
    Derek Potocki recently posted..Reading a newspaper during sexMy Profile

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