What is the best financing method?

Question

I am new to real estate investing. I purchased my first SFH this past August 2020. I did a cash out refi on my home and purchased 3 properties. Two houses are all cash and one is a traditional 20% down 30 year loan. I am taking a hiatus from my job in medicine so I have not been able to refinance the other two yet. Here is my question:

I may have an opportunity to purchase a portfolio of 7 SFHs. Should I pay cash for the portfolio and then one-by-one do cash-out refi's on them or try for a commercial loan to purchase the properties up front?

Also, is it possible to qualify for a loan based on net worth rather than from a job? I saved a majority of my income and paid off all my debt over the years and now I feel like I have to go back to work just to get these properties into mortgages. How do I avoid being forced to work?

Thank you in advance.

Alex Bekeza · Answer

@Nancy Stark There are commercial blanket options that won't require any personal income on something like this. It would all be based on the DSCR/cash flow of the subject properties. What are they each worth in this scenario?

Eric Goldman · Answer

@Nancy Stark if you do it as a package you could finance it. probably a 5 or 10 year arm 30 year AM balloon type product which you will have to go back and negotiate after 5 or 10 years. if you have sufficient money to put down w2 income will not matter. DSC would. are all the units rented? they would all have to be rent stabilized. Feel free to message me or call.

David Kelly · Answer

When did you leave your job? Do you have any capital gains on your previous two years tax returns? There are also some loans available to people with high net worth based on that alone, but I personally have not done one yet.

What is the best financing method?

What is the best financing method?

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