Buying Personal House & Rental Around Same Time

[Michael C.]

Looking to purchase my first home in about 3 months, but also want to purchase a rental property as well. I've worked on the road traveling the last 4 years and finally settling down.

What I'm looking at is a single family home for myself as well as a triplex home as a rental. I have saved enough money to pay 20% down for both properties and have a safety net for several months of payments (if I lost job etc)...

The triple family homes I'm looking at around about 130k - 150k and each unit rents from 850-1100 which allows for the property to fall within the 2% rule. The units could be rented as is but "should" have some cosmetic work done to be more desirable. The area is a small city area in Mass so SFH's are quite expensive to purchase as rentals.

Ive thought my best option is to pick up a triplex and live on one floor while renting the other two... wait until I can show the rental income as income and pick up another rental.... but that technique keeps me living in a triplex. I'd really like my own place and not live next door to tenants. What would people suggest? I'd like to pick up a SFH for personal use and a triplex as a rental while prices are this low! But I realize that doing so, one after another might not work once banks look at the debt to income ratio....

Waiting for a book to come in the mail that talks about this (that was recommended on this site).... Thanks

[Account Closed]

my banker sees rentals as both, assets and liabilities. he watches my debt to income ratio, and sees the loans i have in my name. then i pull out leases and tax returns showing the rental income the properties have brought in. then BAM, they become assets to help get more loans.

as far as getting a mortgage on 2 properties, i have heard of blanket loans that smaller banks will do like this, however it will be a commercial rate loan. this means you will be paying commerical interest rate on your hhome. also, i believe both properties will need to be in same name or entity. thus, either your residence will be in yor business entity (if you have one), or your rental property will have to be in your name. on that note, i would go around and talk to a few banks. try the smaller, local banks, where there's maybe one or two branches only. ask other investors in your area what the investor friendly banks are around, and go there as well. 99% of lenders will hear your plan and get frightened and tell you to slow down. search for that 1 out of 100 bank that will be on your side. the rest of banks are just scared little puppies right now man.