Missouri Investment Property Loans

Securing the right investment property loan is critical to maximizing returns on Missouri rental properties. Read more below to understand the types of loans available, how to purchase an investment property, and why Griffin Funding is the right partner to help you seal your next real estate deal.

Investing in Missouri Rental Properties

Investing in rental properties in Missouri is a lucrative strategy, offering immediate cash flow and long-term appreciation. Major cities like St. Louis, Kansas City, and Springfield have steady rental markets driven by affordable housing, a strong need for rental units, and job growth. Because of this, savvy investors are flocking to Missouri to buy rental properties that can give them consistent returns. A lot of investors are also using the BRRR method—Buy, Rehab, Rent, Refinance, and Repeat—to maximize profits.

Here are some key benefits of investing in Missouri real estate:

• Affordability: Missouri has a lower-than-average cost of living, which means lower property acquisition costs for investors.
• Rental demand: Missouri’s cities are experiencing population growth, which naturally leads to a high demand for rental housing.
• Favorable rental yields: Investors can often secure better returns than other states, thanks to lower property prices and competitive rental rates.

Missouri Investment Property Loan Programs

If you’re unsure how to finance your investment property in Missouri, there are a handful of loan programs you can go with based on different financial situations and investment strategies.

Conventional Loans

Conventional loans are a popular choice for financing investment properties. These loans are not backed by the government, allowing more flexibility in loan amounts and terms. However, they typically require a higher credit score and a larger down payment, often around 20%.

Conventional loans are an excellent option for investors with strong credit and significant capital. The fixed or adjustable interest rates can help lock in manageable monthly payments.

DSCR Loans

Debt service coverage ratio (DSCR) loans are designed for real estate investors. These loans let you qualify based on the rental income your investment property will generate rather than relying solely on personal income.

For Missouri investors with rental properties, DSCR loans are an attractive option because they consider the property’s potential cash flow, making it easier to qualify if the property’s income covers the loan payment and associated expenses.

Bank Statement Loans

Bank statement loans are ideal for self-employed investors or those whose income may not be easily documented through traditional means. These loans focus on your overall cash flow as documented in your bank statements instead of relying on tax returns or pay stubs.

Suppose you’re a Missouri real estate investor with fluctuating income looking to refinance an investment property. In that case, a bank statement loan can be a practical solution since it allows you to qualify for a loan based on your deposits over time instead of a fixed monthly income.

VA Loans

For eligible veterans, active-duty military, and their families, VA loans offer a fantastic opportunity to invest in real estate with no down payment. While traditionally associated with primary residences, VA loans can also be used for investment purposes, particularly when purchasing multi-unit properties where the borrower lives in one unit. VA loans usually have lower interest rates and no private mortgage insurance (PMI) requirements.

FHA Loans

FHA loans are another government-backed option, particularly for first-time investors or individuals with lower credit scores. These loans offer lower down payment requirements (as little as 3.5%) and more flexible credit requirements. FHA loans can be a smart choice if you’re looking to buy a multi-unit property and live in one of the units.

Home Equity Loans

Home equity loans let you tap into the equity of an existing property to finance the purchase of an investment property. These loans often come with lower interest rates than personal loans or credit cards.

Asset-Based Loans

Asset-based loans are perfect for investors who may not qualify for traditional financing because of their financial history or lack of steady income. These loans are secured by the value of your assets, such as other properties or investments, rather than your income.

Missouri investors with valuable assets can use them as collateral to secure an asset-based loan, paving a pathway to invest in real estate without relying on personal income verification.

Private Money Loans

Private money loans, often provided by individuals or private institutions, offer a more flexible and faster option for securing investment property financing. These loans usually come with higher interest rates but have fewer qualification requirements.

Hard money lenders in Missouri are a popular choice for private money loans because Missouri hard money lenders offer fast funding when needed most. Private money loans can be a great option if you’re looking for quick financing—especially for fix-and-flip projects or short-term investments.

How to Purchase an Investment Property in Missouri

Understanding the different types of real estate investment options in Missouri is crucial. To purchase an investment property, we recommend following these key steps:

1. Research the market: Research Missouri’s rental property market and identify cities or neighborhoods that align with your investment goals.
2. Get pre-approved: Work with a lender like Griffin Funding to get pre-approved for a loan. This will give you a clear understanding of your budget so you can move quickly when you find the right property.
3. Choose the right loan: Select the loan program that best fits your financial situation, investment strategy, and the type of property you’re purchasing. Don’t forget to consider the tax benefits of real estate investing.
4. Make an offer: Once you’ve found the right investment property, work with a real estate agent to make a competitive offer.
5. Close the deal: After accepting your offer, finalize the loan with your lender and close on the property.

Why Choose Griffin Funding

At Griffin Funding, we specialize in providing tailored financing solutions for real estate investors. Whether you’re looking for conventional loans, DSCR loans, or private money loans, we offer a wide range of options. Our team of experts is dedicated to helping you secure the best terms for your investment property loan. Plus, with the Griffin Gold App, managing your loans and tracking your investment progress has never been easier.

Lock In Your Rate for a Missouri Investment Property Loan

Griffin Funding is here to help. With a wide range of loan options and a commitment to supporting real estate investors, we provide the financing you need to succeed. Apply now to lock in your rate and start building your real estate portfolio in Missouri.