Are you in a financial Catch-22?

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You buy your first rental property and you have lots of equity to buy another, but you discover that your write-offs on the first property have lowered your income so much that no mainstream lending institution will lend you money. It will take about eight years for the cash flow on the property to give you the income you need to buy another home. You turn to private lending sources, but they want three, four or five percent more for a cash-out refinance loan -- even though the entire loan is collateralized. You're in a Catch-22. The more property you acquire, the more your income drops on paper, even though you're reaping big rewards via appreciation and principal payments. What you really need is a property that produces a high cash flow, but those cost a fortune. Do you have any options other than obtaining funding from a high-interest lender?