How many homes can I purchase?

[Rich Cee]

Good morning BP people! I have a simple question that may help evolve my business plan that I hoping for some insight on. If I qualify for a primary mortgage of about 150k-180k, will I still be able to purchase say 10 investment homes using the 20% down method if each home is 60k-100k? I have the capital to start purchasing multiple investments, but do banks acknowledge that the tenants are paying towards said mortgages?

[Joe Villeneuve]

@Rich Cee Based on what you described above, this is what interpret when I project the numbers out for what you have available for cash starting out:

20% x 10 homes x 60k (min. each home) = $120k.

If this is correct, I would find out what the maximum number of mortgages you are able to get with your lender (investment properties) and do the following:

1 - Let's say the max is 5, including your own personal residence (also mentioned above)
2 - Buy 2 with all cash, then refinance both of them (that makes 3 mortgages you are holding...your personal + 2 rentals)
3 - Take the money you got out of refinancing and repeat step #2 with two more homes (that will make the 5 mortgage limit)

                  .....now comes the fun part......

4 - Find a "Credit Partner".  This is someone looking to get into real estate investing that has good credit (can qualify for their own 5 mortgages), but no cash...and most likely no time to be an investor.
5 - Repeat steps #2 & 3 with them...with you providing the "Entrance Strategy" (the cash IN), and you new Credit Partner providing the "Exit Strategy" (the refinancing to get the cash out to re-use)
6 - Split the cash flow and any future profits if house is sold.
7 - Repeat step #4 - 6 as many times as you can find Credit Partners.
8 - After the last refi, whenever that would be, you refi you (original) cash out, never really ever "spending it"...just using/moving it strategically.

The answer to your original question of "How many homes can I purchase", is an infinite amount with limits based on available homes and available Credit Partners.

Joe Villeneuve
REcapSystem
A2REIC