Stalled on buying my 3rd Property - How to push past?

[Nick Burkhardt]

Hi BP crew! So excited to reach out today. Hopeful that I can get some advise to help me keep pushing forward in my REI journey! I purchased my first 3 unit FHA in APR 2018, and then my second property, a 5% down duplex in JAN 2020 (currently occupying 1 unit). I have $41K in savings and quite a bit of equity in the props already, due to market appreciation! My agent who is really more of a mentor, told me early on in this journey that "Savings don't buy houses, houses buy houses."

I have this decent savings built, but would like to hold onto it as E-Fund, CapEx savings and coming up here pretty soon, a new vehicle (will buy used). I reached out to my lender (used on both deals) and tried to get preapproved for a 5% down owner occ loan on a single family with an in-law apartment (duplex). I was wasn't approved because my DTI: is too high now. I'm looking at my savings and saying it isn't quite enough for a 3-4 unit in the area at 20% dp, and I'd be leaving myself vulnerable. I see the equity I have, despite buying with low downpayments, and keep thinking; am I going about this wrong? Am I attempting to save more, when I should be looking at doing what my mentor said years ago - use the equity I have to buy more houses.

Prop 1 (3.5%dp FHA 2018) - Purch. Price $373K - Current Market Value: $525K

Prop 2 (5%dp Conv. 2020) - Purch. Price $280K - Current Market Value: $460K

I need some ideas to think on, terms to research and advise on how to get this ship moving again. I don't want to stall out with 2 properties at 31 y/o! Have to keep pushing! Thanks BP! Love you all, and have a great day!