How To Rapidly Expand Rental Home Business
I have 5 rental homes in tampa FL area, I WOULD LIKE TO HAVE 12 IN A YEAR. The banks have made it harder to get mortgages, bumped up my rates to about 7% with 10% down making a $150,000 3/'2 cost me 1000/month, which can rent for 1200/mo. The down payment money is running out,; I can borrow another $50000 cheaply for a year, but I need $150000 to buy 10 more houses!! All my rentals are mortgaged up to 80-90%. how do you get a loan on the locked-up equity?
Thanks paul
Paul,
How long ago did you buy the 5? Do they have pre-payment penalties? If you have had them at least 6 months and there is no PPP, then you can find programs that could do a refi for you.
You should also try two additional tactics.
(1) On contracts, ask for money toward closing costs. I ask for 6% back toward closing costs on all contracts. Keep in mind this is legal so long as the 6% does not push the purchase price above the market value.
(2) Learn how to pitch seller financing. Find out what the owner plans on doing with the money, if they plan on investing it in a CD, savings, or the stock market, tell them you will pay them 10% which they probably will not get that type of return anywhere else. If you can negotiate 10% owner financing combined with a 6% back, you should get in with very low or no money down. I reccomend reading Robert Allen's Nothing down for the 2000's which you can probably get at your local library.
Hope that helps
[addsig]
In addition to Rays advise, look for retiring landlords who don't want to pay their capital gains all at once and still like the monthly income. Never forget that sellers are the #1 lender in the world.
Good Luck,
Shawn(OH)
If you can find a rehabber who retails fixed 1-4 unit residential properties, there are seller financing programs that allow you to come in with zero down if they sell at least a 95% of appraised ARV or less. Rates are higher, but with zero down, maybe it makes it worth it to you.
You could become a strong buying source for rehabbers. Rates are usually around 8% or so with strong credit, which it sounds like you have.
Just throwing options out there. Best, Dave