Struggling to get financing!!! Own 2 rental homes - no debt

[Arthur Nunez]

Hi All,

I have 2 homes, free and clear, in Dickinson North Dakota that i am generating $1500 each in rent per month. I have an opportunity to build 2 more homes and sell them but I am struggling to get financing to build them. Banks are telling me that I cannot use the rental income to qualify for the loan until I have been renting for 1+ years. 

Do you have any ideas on how I could get financing to continue moving forward on building up my portfolio? Any help and suggestions would be greatly appreciated. 

Thanks, 

Arthur

[Joel Owens]

Get an investment partner that has the cash to go in it with you or go after passive investors.

You would need to know how much the land and building all in costs are compared to the rent ratio.

So if the land and building costs you 100,000 and you have 1,500 in rent per month that is a 1.5% rent to cost ratio.

75,000 all in for land and building is 2% rent to cost ratio.

Unless a local investor to partner the outside investors will read all the new stories and will generally want increased yield for the extra perceived risk.

If your rent to cost ratio is 1 it will be a very tough sell because people can buy in very high quality areas that are not oil dependent for that metric that are seen as very safe.