Real estate investing and credit score

[Matt Wanner]

Hi,

I am fairly new to real estate investing, and very interested in growing my real estate portfolio. I purchased my first duplex in 2016 with an FHA loan and have lived there since. I am now under contract for my second duplex with my sights already set on my next investment. I am using a HELOC on my first duplex to help supplement me on the second property. All of this debt added on top of my student loan debt makes me curious as to how my credit score may react, and how difficult it may be to swing my next deal. I have never missed a payment and my credit score is generally in the high 700s, but I was wondering if anyone had any advice or insight.

Thanks in advance!

[Christina Linn]

@Matt Wanner This depends a lot on the banks.  Some only allow 4 mortgages on anything 4 units or less, some allow up to 10.  Most banks take 75% of rent as income and your debt to income ratio can be 40% for most investment properties with most banks.  I would certainly not take the "who cares" approach, but to each their own, I guess.  If you want to make it far in real estate you should care about every single number that will affect your next deal.  If you don't understand the game you can't be very good at it!

All that being said, every bank differs.  I am a seasoned investor with 19 rentals and a laundromat and I put my last deal on credit cards, which temporarily dropped my score 100 points.  Because I understand the game I knew I would be able to refi and pull equity out, which I just did a few weeks ago.  Relationship banking is my best friend and I understand everything the bank looks at and needs so that I can keep my numbers where they need to be to get my next property.