scine
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- Jun 23, 2008
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Hello all,
So I've finally gotten around to investing in my first rental property and all is going well. However, I have a few questions about financing and hoped some people on here would be able to help out.
So, according to just about every lender out there, banks will only count 75% of your rents as income towards purchasing the next house.
For example, I make $60,000 a year, have a $1,600 a month mortgage on my home I live in, and would have a rental that rents for $1,000.
So, the banks will only count $750 of that $1,000 a month towards my "income" to qualify me for the next property I purchase.
Thus, it seems like it would be harder and harder to get financing as you accumulate properties.
So, my question is how do you get around this? I'd love to be able to pick up say 10-15 properties over the next 3-5 years, but it seems like that is very unlikely, unless I can figure some way around this issue.
Secondly, I keep hearing people talk about hard money loans to purchase my properties, then immediately refinance them with a normal bank. Is this a good strategy, and would it work around the 75% issue?
I have about $25,000 in cash at the moment, and have found a property listed for $135,000 and I offered $110,000. The seller accepted and now we're waiting for bank approval (short sale).
Any and all tips would be greatly appreciated. My goal is to have about $3,000-$4,000 a month in cash flow within 3-5 years.
This plan has been a long time coming, and now it's almost here!
Thanks in advance for all your advice.
So I've finally gotten around to investing in my first rental property and all is going well. However, I have a few questions about financing and hoped some people on here would be able to help out.
So, according to just about every lender out there, banks will only count 75% of your rents as income towards purchasing the next house.
For example, I make $60,000 a year, have a $1,600 a month mortgage on my home I live in, and would have a rental that rents for $1,000.
So, the banks will only count $750 of that $1,000 a month towards my "income" to qualify me for the next property I purchase.
Thus, it seems like it would be harder and harder to get financing as you accumulate properties.
So, my question is how do you get around this? I'd love to be able to pick up say 10-15 properties over the next 3-5 years, but it seems like that is very unlikely, unless I can figure some way around this issue.
Secondly, I keep hearing people talk about hard money loans to purchase my properties, then immediately refinance them with a normal bank. Is this a good strategy, and would it work around the 75% issue?
I have about $25,000 in cash at the moment, and have found a property listed for $135,000 and I offered $110,000. The seller accepted and now we're waiting for bank approval (short sale).
Any and all tips would be greatly appreciated. My goal is to have about $3,000-$4,000 a month in cash flow within 3-5 years.
This plan has been a long time coming, and now it's almost here!
Thanks in advance for all your advice.
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