Financing Dilemma

[John Hauser]

Hey everyone! I have a rental building that I own with two partners, on the south side of Chicago. We own it free and clear, and it generates a profit of about $600 per month, and will about double when we get the basement done and rented. We're feeling great about what we've done so far, and looking to buy a second building around the beginning of the year.

Unfortunately, all the traditional lenders I've spoken to won't lend us money unless one of the three of us is personally on the hook for the loan. That's not great because it means one of us has credit limitations and that we need to spend a lot of our income paying off the debt to get the person free. Seems like our expansion will be really slowed by that.

Hard money lenders might be an option. But everything I've heard is that they are high interest, short term loans, so it appears we will likely be in the same situation of using all of our profits to pay off the loan, also limiting our ability to grow.

Can someone tell me what I'm missing? I really like this website so I'm hoping someone can un-dilemma this for me. Thanks!