This idea just crossed my mind. Will I get approved for a 2nd and 3rd loan? Here’s my current case. I have a house being rented out (and currently mortgaged). What if I spotted a high-potential area and wanted to buy a lot there (from a loan) and decide to have, say a commercial space for rent to be built (from a loan as well). Is this a good idea or too much loans is a no-no? Thanks.
There is no such thing as too much loan as long as the loan is to facilitate a business venture that pays for the loan. In otherwords the business venture has to pay the note each and every month. That being said I would never take out a loan for a lot unless I was going to develop the lot with the loan.
Your goal should be to borrow $1billion and buy the empire state building.
Current loan guidelines allow you to finance up to 10 properties (it gets much harder after the 4th one because not all banks loan on the 5th - 10th property).
Lenders are going to make sure that your LTV ratio is good, your credit score is high enough to reduce their risk and that the properties can produce enough income to pay the loans. If you can meet their requirements then there is no reason why you cannot get a 2nd or 3rd loan.
Leverage is an investor’s way of creating wealth - just use is wisely.
Most commercial lenders are risk-averse; they charge higher interests rate than on a comparable home loan. Before deciding how much to borrow, what is important is to analyze your ability to repay the loan as it is structured.