Financing Second, Third Deals

[Andrew Poitras]

Hey crowd, I am a young investor and I just liquidated my first deal. It was financed through FHA, and I profited six figures. I feel good about it, but now I’m trying to figure out the smartest and safest way to keep and grow this profit. I have a salary position and plan to apply for a second FHA for a new property. Even if I put down 10% down on this next property, my second deal, I will still have money left over and would love t get into the next and third property as soon as possible. The problem I am foreseeing here is that even though I will have some funds in the bank, lenders are going to look at my income and tell me that I don’t have the monthly cash flow for two concurrent mortgages. Can you all share some creative ways to finance concurrent properties? I have done a little reading about hard money but the high interest rates would only make sense for a flip. If I’m going for two buy and holds (one of which will be my primary residence) the hard money doesn’t seem to make sense.

[Alex Bekeza]

@Samuel Pawlitzki@Andrew Poitras

Congrats on the early success!

With the little that I  know simply from your post I would advise you to only put down the minimum 3.5% for your primary residence.  I assume this is a multifamily unit that you will be renting out portions of...

If done effectively, your tenants will pay the majority of your mortgage.

Your going to want to leverage as much money as you can for the third property (the true "investment" property in the sense that you will NEVER occupy it.

Having concurrent mortgages will not be an issue.  Figure most investors don't own their primary homes out right without a mortgage.  As a matter of fact, responsible history reflected in your mortgage statement will HELP you get financing for that third property.

What I can tell you is that you won't want to drop the full 10% on your FHA primary because even with your successful first deal your experience is not going to circumvent you from needing to put down 25-30%.

I work with hardmoney and private lenders who will finance investors without calculating Debt to income ratio so long as you have the right down payment and strategy.  

Feel free to direct message me if you'd ever like me to shop some rates for you.

I hope this helped a little bit.