Trying to purchase multiple properties

[Patricia C.]

Hello

I currently own 2 properties. One is currently rented in Greenwich CT, the other I just purchased in Norwalk CT and in the middle of renovations before I rent it out.

I would like to purchase a 3rd home by the end of 2024. How do I go about getting approved when I am already maxed out on getting another mortgage..? 

[Clint Jusino]

Quote from @Patricia C.:

Hello

I currently own 2 properties. One is currently rented in Greenwich CT, the other I just purchased in Norwalk CT and in the middle of renovations before I rent it out.

I would like to purchase a 3rd home by the end of 2024. How do I go about getting approved when I am already maxed out on getting another mortgage..? 

I would look Into creative financing or DSCR loan. That's what I plan to do after my rehab is completed next week on my 2nd rental property.

[Samuel Eddinger]

I'd talk with @Devin Peterson. He can discuss DSCR loans and is CT based.

[Devin Peterson]

Quote from @Samuel Eddinger:

I'd talk with @Devin Peterson. He can discuss DSCR loans and is CT based.

 Thanks @Samuel Eddinger!

Patricia, Happy to connect with you about best local options. There are bunch of creative ways that don't require traditional financing. 

[Kyle Spearin]

@Patricia C. looks like there's a lot of DSCR suggestions. Would you also be open to house hacking? I'd speak with a lender about this, but they can probably use your rental income towards the next property or at least use it to help with your DTI ratio. Good luck!

[Wale Lawal]

@Patricia C.

When you're looking to purchase a third home but are already maxed out on your mortgage capacity, there are several strategies you might consider to improve your chances of getting approved for another mortgage. Here are some steps and considerations:

Lenders look at your debt-to-income ratio (DTI) to determine your ability to manage monthly payments on the money you borrow. Increasing your income can help improve your DTI. This could be through finding ways to increase the rent on your existing properties, taking on additional work, or finding other income streams.

Reducing your current debt levels can also improve your DTI ratio.

Improve Your Credit Score.

Look into various financial institutions, including community banks, credit unions, and online lenders, which may have different criteria or offer programs for investors.

Since portfolio lenders retain their loans in their own portfolios rather than selling them on the secondary market, they are able to provide greater flexibility. Despite the possibility of higher interest rates, they can have more accommodating qualifying requirements.

If you currently own homes with a sizable amount of equity, you may be able to get funds for your down payment through a cash-out refinancing or a home equity line of credit (HELOC). On your current properties, though, this raises the danger and leverage.

Partner with Additional Investors.

Speak with a Mortgage Broker or Financial Advisor: A specialist can guide you through the mortgage application process and provide tailored advice. In order to increase the likelihood of acceptance, they may also assist in identifying the best lenders for your circumstances and offer advice on how to structure the agreement.

It's crucial to carefully consider the additional financial strain another property can bring and ensure your investment strategy aligns with your long-term financial goals. Each option comes with its own set of risks and benefits, and a careful evaluation is necessary to make the best decision for your circumstances.

[Brayden Hrycko]

Hello @Patricia C.,

You would want to look at your DSCR options. Sounds like you are maxed out on your Debt to Income with these two homes. DSCR does not look at your income. They just look at the performance of the property, your credit score and proof of assets for downpayment/closing costs. Feel free to reach out if you'd like to see your options.