Alternate Methods of Financing?

[b]My husband and I have purchased a few income properties…a couple of homes in the process of being built and one new existing home that we are renting out. We also just purchased a fourplex in another part of the country. We live in Northern California, so you can see why we had to purchase in other states. My question is, how does one continue to get financing after having bought a certain number of properties? After a while, the funds are depleted. We still want to invest and buy more properties. Is the only way to go an 80/20 loan? What can you do if you still want to invest in real estate, yet you’ve run out of money?

Thanks everyone! [/b]

how long have you had your properties? Have they incresed in value since you purchased?

We have owned the SFR we’re renting out for only 3 months. We have two other houses that are in the process of being built. We’re due to close on those sometime in May or June. We should be closing on our fourplex within the next week. I know after a certain number of properties, lenders aren’t as quick to loan to investors - even though our scores are good (high 700’s). Just wondering how we can continue to invest once our funds run out…

money is something you can always find. There are 1000’s of banks and most will do 2-10 deals before they won’t lend again. As long as you maintain scores in the 700’s stick with conventional loans, but before you move forward do the math to make sure they will approve you! Banks do not count $ for $ of rental income, they discount it by 25% so if you have a mortgage of $1000 and a rental income of 1000 they banks view this as a liability of $250 and it gets tacked onto your ratio’s you would need to show a rent of 1330 or so to break even with the bank!
In response to your question you still need to show banks reserve funds(6months). This can be accomplished with IRA’s 401K’s if there is nothing left in the savings or checking.

Thanks very much for your information and suggestions. I didn’t know that about the rents having to be even higher for it not to be counted against you in the eyes of the lender. I guess we’ll have to bump up our rents when the time comes. I know we have to be careful with that so as not to lose tenants. The fourplex is in Louisiana.