How do I start with 220K?

[Luke Crouterfield]

Hello, 

I'm looking to purchase my first rental. I have 220K to do it. Of course I could purchase a flipper with this cash and start from there. However, I'm not sure this is the best strategy to eventually be able to purchase a second rental as I won't have any cash left. 

I don't think I could get a very large loan from the bank because I'm currently paying on a mortgage and don't have a lot of passive cash flow. With that said, I have about 170K left on the mortgage and my credit score is over 800. I plan to eventually rent this house as well. I purchased it a few years ago thinking it could make a good rental one day. 

Any thoughts on a strategy that would best set me up to eventually purchase a second rental (third counting my current residence) would be appreciated. 

[River Sava]

Hey Luke - Looks like DSCR might be a good option for your senario. Some lenders can do a "no ratio" DSCR which is where the DSCR is not 1:1 (aka negatively cash flowing). They are a great tool when it comes to scaling which seems like it is your end goal.

Happy to connect and chat further about this/send over helpful materials to read through!