How to buy two rentals in one year?

Question

How do you buy two rentals in one year? I was going to buy a owner occupied duplex with 3.5% down then buy an investment property using 25% down but my DTI ratio would not qualify for both mortgages in the same year unless I used a dscr loan but then the interest rate would be very high, and it'd be hard to make a deal work using a dscr loan because of that. So, I am just curious how other investors have managed to buy 2 rental properties in the same year in the building phase of their portfolio.

Thanks!

John Morgan · Answer

I bought 2 rentals a year for the first 7 years. I found ways to borrow the cash and did 5 cash out refis within 7 years to recycle the equity to scale up. These cash outs got me 14 houses with no out of pocket $. Felt like I was getting houses for free. I’ve bought 5 houses from 401k loans too. And a few from 0% interest for a year credit card loans too. And got a couple houses from random lines of credit from banks. It wasn’t pretty, but that’s how I scaled up buying and holding 29 SFR without using my savings to acquire these houses. And I used all my rental mailbox money over the last 9 years since I first started investing to buy more and more. Grind it out for 5-10 years like this and you’ll be set for life. Good luck!

Travis Timmons · Answer

I'll second @Joe Villeneuve - why?

Also, if you have not already bought 1 property this year, focus on that. There is only 1 guarantee when you buy a property - you are about to spend a pile of money. Get on the other side of stabilizing property 1 before you start thinking about buying a 2nd property.

Joe Villeneuve · Answer

Why do you want to buy 2 rentals a year?

Robin Simon · Answer

Hi, you seem like a potentially good candidate for DSCR Loans, a loan product that was essentially designed for exactly this - investors that want to build a portfolio relatively quickly and not be slowed down by DTI requirements or other hassles from conventional options.

Would be glad to help, also check out this 12-part series published here on BP on everything you would ever want to know on this loan option!

BP-Published DSCR Guide!

DSCR Loans: What Are They And How To Get The Best Terms

https://www.biggerpockets.com/...DSCR Loans: How To Use Pro Strategies To Save More And Make More

https://www.biggerpockets.com/...Multifamily DSCR Loans: A New High-Impact Loan Option For Real Estate Investors?

https://www.biggerpockets.com/...12 Frequently Asked Questions (And Answers) About DSCR Loans

https://www.biggerpockets.com/...

8 More Commonly Asked Questions and Answers to DSCR Loans

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Carini Rochester · Answer

Get the bank financed property first, while you have the DTI. Buy the owner financed property second. Owner shouldn't care about your DTI. The owner should look at it more like a DSCR, and should be pricing the property and offering terms such that the income from the property is adequate to pay back the loan.

River Sava · Answer

Hey Sean,

What rates have you been seeing for DSCRs right now? They might be lower than anticipated and are a great tool for what you are looking to do. Sending you a dm.

Derrick Lewis · Answer

My DSCR loans, aside from the very first one I got with poor credit, have been right around or below average interest rates. Have you applied for one?

Ian Kay · Answer

Dave Meyer and Henry Washington talked about their strategies for buying multiple properties on yesterday's episode of the BiggerPockets Real Estate Podcast: How to Buy Multiple Rental Properties a Year (Is It Possible?).

Spoiler alert: They think there's a different question to ask first!

Bryan Stengel · Answer

Hi Sean, I wouldn't rush into anything that you are not comfortable with the numbers.  Obtaining the FHA loan is great and you could repeat the process after about a year with the right lender.  Also I've heard of some DSCR loans that are not too far off from conventional rates.  In the meantime, just focus on filing the vacany of the first property you bought and get familiar with what it's like to own a rental property first.  That would be my suggestion.

Wale Lawal · Answer

@Sean Gammons

If you’re aiming to buy two properties in a year, start with an owner-occupied duplex using an FHA loan, leveraging rental income to qualify. After closing, work on increasing your income, reducing debt, and preparing for a second mortgage. Explore options like conventional loans, DSCR, seller financing, or partnerships, and connect with local lenders to find the best fit for your strategy.

Good luck!

How to buy two rentals in one year?

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