Wholesaler · Knoxville, TN · Member since 2016 · 247 posts · 76 votes
So I have yet to own a property but have a personal goal of either buying and holding a cash flow rental property by year's end. I just need to get that credit score up a little more. I'm about there
Anyway, I am a veteran and I make a decent middle class salary at my full time job. I don't plan to use the VA loan for my first buy but that's another topic. I only bring this up to give you a little insight as to where I am, where I want to be, and how you can help me get there by providing your knowledge in your answer.
What I want to know is, after listening to a podcast with Bill Allen who had only been investing for a few years and now owns five rentals, how does a person finance five properties? Can you take multiple home loans out at a time? Is it the ability to show loan providers the other properties are being paid down? Does owning investment properties change a person's ability to gain multiple loans as compared to a person buying for residential purposes?
Investor · North Augusta, SC · Member since 2015 · 52 posts · 14 votes
10y
It all comes down to mortgage math in terms of what your income can support (debt to income ratios), cash on hand (reserve requirements), credit score, etc...
Buying a lot of properties quickly can be challenging, but it gets easier after you can show records of being a landlord for 2 years such that the income from your rentals can be counted.
I have purchased 7 properties in the past 3.5 years, and 3 within 3 months from October 2015 - January 2016, so it can certainly be done.
Investor · North Augusta, SC · Member since 2015 · 52 posts · 14 votes
10y
It all comes down to mortgage math in terms of what your income can support (debt to income ratios), cash on hand (reserve requirements), credit score, etc...
Buying a lot of properties quickly can be challenging, but it gets easier after you can show records of being a landlord for 2 years such that the income from your rentals can be counted.
I have purchased 7 properties in the past 3.5 years, and 3 within 3 months from October 2015 - January 2016, so it can certainly be done.
Rental Property Investor · Wake Forest, NC · Member since 2016 · 186 posts · 78 votes
10y
We are in the process of getting 3 investment properties right now. Yes, you can definitely do multiple loans. How many at once will depend on previous rental history income. 2 of our homes we are using a conventional loan. If you go to a small bank and speak directly with a mortgage banker they will help you, especially if they know you plan on working with them exclusively for your investments.
Real Estate Agent · Willoughby, OH · Member since 2014 · 560 posts · 690 votes
10y
I know you said that you don't plan to use your VA for your first buy... but... look into house hacking on this site. Buying an owner occupied 4 plex with your VA loan would put you way ahead. I am actually selling my house right now in order to use an fha loan to buy a 3 or 4 plex due to the low down payment. You essentially will get four units for the loan hassle of one. I recommend you listen to bp podcast #86 for details on this topic.
Real Estate Broker · Windsor, CT · Member since 2015 · 1k+ posts · 268 votes
10y
@Benjamin Barredoto finance 5 properties at once you are looking at portfolio lending. I would suggest looking at local small banks or credit unions for this.
You can get multiple loans at a time or one after the other. It all comes down to Debt to Income ratio and your ability to cover the down payment/closing cost and reserve requirements. If the property you buy has a tenant in it then 75% of the rental income would be credited to you as income.
Wholesaler · Knoxville, TN · Member since 2016 · 247 posts · 76 votes
10y
Thanks a lot. This information is making sense of things though being a bit uneducated on them leaves me with a few questions still.
After starting this forum @jeff brower I read about "house hacking" with a VA loan, plus a FHA (is that the low down payment loan?) and that it can be used for a multi unit home. Plus, if I only live there for a year that there are stipulations of getting out of raising there and even using another VA loan to purchase more real estate.
Very exciting stuff.
I didn't think about the fact that the cash flow generated from the rentals would count as income on new loans, butt makes perfect sense.