All Forum Posts by: Liam Story

Thanks Dave! That makes sense. I was talking to my banker and he actually mentioned doing a portfolio loan using the equity from my first property as collateral for the next one. 

Hey guys, hopefully this question makes sense. I'm just a small time investor, but my portfolio is to the point where I will be expanding through 1031 exchanges into new properties. Within the next year or two I will need to purchase multiple properties within the same year (5 or more). How does this affect my credit? I've heard of big time investors that are purchasing hundreds of properties a year and they "borrow" or "rent" other people's credit. Although I don't know if that's accurate or how it works. Every time I get a new loan on a new property they pull my credit which obviously damages the score. I've also heard that there is a limit to the amount of loans a bank will give you within a certain time period. I am buying all of my properties with their own LLC and not holding them in my personal name, but the bank still wants a personal guarantee. Will there be a banking issue when my portfolio gets to the point where I'm needing to purchase say 20 properties or more a year?

Lastly, my salary is about $140K/year. Does income to debt ratio factor in or not? I assume as long as the property cashflows well and my debt coverage ratio is good (I usually shoot for 1.6 or more), then it won't matter, but I'm not sure. Thanks for the help!

Investment Info:

Mobile home buy & hold investment in Branson.

Purchase price: $185,000
Cash invested: $37,000

1 out of 9 lots empty with rent being significantly lower than market price. Mostly retirees who pay rent on time (if not early). Plan to buy a trailer and do a lease option on the empty lot to increase cashflow.

What made you interested in investing in this type of deal?

Tenants were very responsible and paid their rent on time which makes the property incredibly easy to manage.

How did you find this deal and how did you negotiate it?

Through my realtor.

How did you finance this deal?

80% loan 20% down with my bank.

How did you add value to the deal?

I will slowly be raising rent as the cheapest lot rent in this area is $225/month (for a rundown park in a bad area) and lot rent established by the previous owner is only $175/month. I am also about to purchase one of my tenant's mobile homes at a great deal. I can secure 100% financing so I will be able to do a lease option with the trailer and start cash flowing day one. If that goes well, I will do the same with the empty lot which should also help increase my equity.