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The first major difference between purchasing My First Property and purchasing My Second Property, is the financing strategy I'm using. While I paid ALL CASH for My First Property, I don't have the reserves to purchase this next investment outright. But, I'm fine with that. I really have no desire to buy it cash even if I could. Why? Through my experience purchasing one property all cash, I realized the amazing power of leverage. Yes, cash flow is negatively affected with a mortgage, but your dollars can go much further, you can scale much faster, and your cash-on-cash return can be larger. Check out my post on the various Pros and Cons of having a mortgage vs. paying all cash HERE.  So, the adventure to find money began. Luckily, as I mentioned in my previous post, I met some great connections in Indy. Through the jam-packed weekend I connected with a lender who is now a crucial, crucial component of acquiring My Second Property. The process of getting a mortgage was a little intimidating at first...I'd never gotten one before! But, looking back, it was smooth overall. A little laborious, a lot of documents had to be tracked down, but again, very smooth. So what was the process like? Step 1 Fill out an Online Mortgage Application. This required basic contact information as well as: -Loan information (how much are you asking for?) -Detailed personal information -Employment and Income information -Assets and Liability information -Declarations -Consent and Confirmation This all took about 15-20 minutes to compile and complete. Step 2 After submitting the online application, I got in touch with my lender and he required a few additional documents: -Last two paystubs -The past two years W2s -The past two years tax returns -Last two bank statements for all accounts -Copy of my driver's license He also set up a BOX account (cloud storage) so I could upload everything for his team to access instead of emailing everything over. Step 3 This step was a simple waiting game as the lender had to assess my qualifications. Within a day, I was pre-approved! I'm going to assume it helped that I'm targeting a property in the $100,000 range...and not a house in the Bay Area for $700,000. Key Information when applying for a mortgage -Lenders won't give out loans to financially risky individuals. A good credit score, a steady paying W2 job (being self-employed makes you a little more risky to lenders), and having a sizable cash reserve will help your case for a mortgage. Make sure these are in tip-top shape before looking for a loan. -If you plan to purchase a distressed property...one that needs a lot of rehab work...don't assume you can get it financed. Lenders won't provide financing for risky assets. -Keep your files and documents organized! If you plan to build a large real estate portfolio with the help of bank financing, this won't be the only time you'll be asked for a W2 from two years ago or your tax return from last year. -Mortgage rates change daily, so if you're getting 4.5% one day, it could easily jump to 4.75% the next day. Before offering on a property, always ask your lender for the most up-to-date interest rate so you can accurately analyze it.  And with that, I'm ready to look for my next investment! I've got a pre-approval letter in hand, a $100,000 budget, specific investment criteria in my head, and a new sense of excitement. I'm jumping in to property #2. LET'S DO THIS! -Tyler
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