Minnesota Investment Property Loans

Why Invest in Minnesota Real Estate?

The Minnesota real estate market is excellent for investors. According to data from Redfin, the median sale price of Minnesota homes increased by 2.2% year-over-year, with significant increases in cities like Inver Grove Heights, Stillwater, Lake Elmo, St. Cloud, and Duluth.

Other popular places to buy rental property in Minnesota include Forest Lake, Chanhassen, Minnetonka, Hutchinson, and Albert Lea. These fast-growing areas offer investors a lucrative investment opportunity.

If you want to enjoy the tax benefits of real estate investing, property tax rates in Minnesota are slightly higher than the 0.99% national average at 1.02%. With diverse investment opportunities and reasonable rates, Minnesota is an excellent choice for new and seasoned real estate investors.

Some of the common types of real estate investments in Minnesota include:

• Long-term rental properties in popular cities like Minneapolis
• Short-term rentals and Airbnb properties in scenic towns like Lake City
• Housing for students in the Twin Cities area
• Fix and flip properties in areas that are growing
• The BRRR method (Buy, Rehab, Rent, Refinance, Repeat)

Minnesota Investment Property Loan Types

Griffin Funding offers a wide range of flexible loan solutions to ensure investors have the financing they need to purchase real estate. But, choosing the right loan based on your financial situation is critical. Let’s take a closer look at some of the investment property loans in Minnesota:

Conventional Loans

Investors who meet credit score and income requirements can qualify for a conventional loan, also known as a traditional mortgage. Conventional loans have more stringent credit requirements than other loans, but they’re simple and offer competitive interest rates. To get approved for a conventional loan, you usually need a credit score of at least 620, provable income, and a down payment of 3%. By making a 20% down payment, you can also avoid private mortgage insurance (PMI), allowing you to save additional money.

DSCR Loans

If you don’t have excellent credit or significant income you can verify, DSCR loans are an alternative option for investors. Lenders compare your debt to the cash flow a rental property will generate; if your rental cash flow is enough to pay off your debt, you may qualify for a loan. While not as strict, Minnesota hard money lenders may still have credit score requirements for DSCR loans.

Bank Statement Loans

Whether you’re self-employed or you have irregular income that bars you from getting approved for a loan, bank statement loans may be the solution you’re looking for. If you can provide 12 consecutive months of bank statements from the same account, you may be able to get approved for a loan. You typically need a slightly higher credit score to get approved for a bank statement loan.

VA Loans

VA loans are offered by the U.S. Department of Veterans Affairs. These loans are available to veterans, servicemembers, and eligible surviving spouses. There’s no down payment required, limited closing costs, and no PMI requirement. If you qualify, VA loans are an excellent choice for first-time homebuyers.

FHA Loans

The Federal Housing Administration (FHA) offers FHA loans to aid people who can’t qualify for a traditional loan to purchase a home. FHA loans have lower credit score requirements and lower down payments, and closing costs can be rolled into your loan. FHA loans are worth looking into if you can’t qualify for a traditional mortgage.

Home Equity Loans

If you currently own a home you have significant equity in, home equity loans allow you to leverage that equity to invest in real estate. Lenders typically require between 15 and 20% equity in your home to get approved for a loan. Once you’re approved, you can usually borrow around 80% of the value of your home equity. Keep in mind that you can lose your home if you default on your loan.

Asset-Based Loans

Asset-based loans are backed by collateral. To get approved for an asset-based loan, you must use an asset — like your business’s inventory, equipment, or property — as collateral. If you default on your loan, your collateral assets can be seized. However, asset-based loans are popular among investors because they offer greater flexibility.

Private Money Loans

Private money loans are offered by a private organization or individual rather than a financial institution. These loans are backed by collateral, so your credit score, income, and debt aren’t as important. Private lenders may offer more flexibility, but it depends on the lender.

How to Secure an Investment Property Loan in Minnesota

Buying rental property in Minnesota is easy with Griffin Funding. Here’s what you need to do to start investing in real estate in Minnesota:

• Figure out how you want to invest. From single-family homes to apartments and short-term rental properties, there are countless ways to invest. Decide how you want to invest so you know what financing you need and which types of properties to look at.

• Choose the right financing. Figure out what type of loan is best for you based on your credit, debt, income, and assets. Consider your down payment, interest rates, and qualification requirements.

• Find real estate and apply for a loan. Look for properties that you want to invest in and take some time to review and compare properties thoroughly. Once you’ve decided on a property, you can get your financial documents in order and apply for a loan. You can start investing as soon as your loan is approved and funded.

Why Choose Griffin Funding

At Griffin Funding, we work hard to provide diverse investment property loans in Minnesota. Here’s what makes us unique:

• We have experience in the Minnesota real estate market.
• We offer competitive interest rates to help you save money and maximize your investment.
• We provide flexible loan solutions suitable for a wide range of investors.
• Our loan specialists provide personalized service with every loan.

Finance an Investment Property in Minnesota

Buying rental property in Minnesota can be an excellent investment decision — especially with the right financing. With several rapidly growing cities and suburbs, Minnesota can be lucrative for investors looking to expand their investment portfolio.

Get personalized financial analysis and gain deeper insights into the Minnesota real estate market with the Griffin Gold app.

Are you ready to invest in Minnesota property? Apply now or contact us to learn more about our financing options.