money problem..

[Jim Chung]

i tried to follow BRRR strategy but running into problem....purchase a condo 4 weeks ago with 40% down with mortgage $100K at 4.3% interest rate...i have good tenant with 2 years lease and make good cashflow..~$500/ month after expense and mortgage.

the bank stated i pretty much max out my debt/income ratio and not be able to further any loan. i currently have $50K cash on hand...what options do i have to do more real estate deal with BRRR strategy?

even though my rental condo make good cashflow and i have stable work job , bank does not seems to care for that and just look at the debt/income ratio..tried big and locaL bank without success. not qualified even for HELOC

PLEASE Help

[Wendell De Guzman]

Not sure whether your strategy is really BRRRR (Buy-Renovate-Rent-Refinance-Repeat)

If it is, you will create equity when you buy and renovate the property. 

E.g., buy & fix a house worth $200K for only $120K. Let's say you put down $40K and finance $80K

Then you Rent it and Refinance it at 70% LTV allowing you to pull out your cash (original $40K) and get more cash (say $15K more cash by the time you pay all the closing costs).

By doing this, you now have more cash to buy your next deal (Repeat). In theory, you will not run out of cash to buy deals. In practice, some banks require seasoning (6 months usually) so you have to wait to purchase your next deal or raise more cash so you can do BRRRR with new cash.

If the issue is you can't refinance even while you create the equity, then the issue is you don't have the right lender. Find a portfolio lender to help you. They don't care too much about debt to income as much as conventional lenders do. There's also no limit to how many loans you can get as a result.