In Arizona and across the nation, the newest fad in the real estate market involves buying secondary residences as a potential source of profit. This has become easier for most as the price of homes has decreased significantly in the last year, and most investors are split into two general categories. One group takes the traditional approach to buying a secondary property, in which they rent the home or homes for an extra source of income. There are still others, however, in the second category that take convention and throw it out the window. This group is interested in selling their secondary properties as soon as possible for as much profit as possible. They are often referred to as “home flippers,” because they “flip” (rework) as little or as much of a home’s appeal as necessary in order to make it sell for a significantly higher price than what they paid. As a source of big and exciting news to investors, Fannie Mae has recently increased its loan limits to financing ten houses per individual instead of the previous four, making it easier for Arizona flippers and landlords alike to make even more money from secondary residences.

As stated previously, the recent economic downturn has made homes more affordable now than ever, attracting many new investors to the real estate market. Investor loans have become increasingly popular because of economic home prices and the amount of homes that are currently on the market. These loans are intended to be used by those who are purchasing a property they don’t intend to use as their primary residence. Simply put, Arizona investor loans are typically used to buy homes that are going to be used for rental properties or flip projects. For those investing in secondary residences, it is important to know what types of investor loans are available. It is also important to determine which loan will best help you meet your goals for your secondary residence.

Three of the most popular options in investor loans include the fixed-rate loan, adjustable-rate loan, and balloon loan. The fixed-rate loan is typically sought after by those in the first category discussed previously: those who wish to use their secondary residences as rental properties. This is because fixed-rate loans are equipped with interest rates that do not oscillate with economic conditions. This is great for potential landlords because they generally intend to retain their properties for a long period of time. Adjustable-rate and balloon loans, on the other hand, are more perfectly situated for home flippers. Oftentimes with these types of loans, interest rates begin small and are stipulated to increase only after a certain period of time, typically a year or two. For that initial period, however, the rate is relatively small and also does not oscillate with the economy. This is an ideal scenario for home flippers because they generally do not intend to keep a property for an extended period of time anyway, so they can take advantage of the low interest rate while it lasts.