Help, need info on finding/closing my third investment property (fourth property overall)
Hello All,
I am new to the forums, so please don't attack me if I'm asking the stupidest questions. I have been reading Brandon T.'s book on "Investing... No Money Down" but I haven't yet networked enough I think and I believe it may be hindering my progress.
I have two investment properties + my residence. All my properties are presently with mortgages from the bank. I kind of fell into this situation that I wanted but I didn't take control as I should have early on. Let me explain.
I lived in a townhouse, I'll call it PropA, for 4 years (bought in 2008 with the 8k tax credit), paid 200k for it, refinanced to a 15 yr loan in 2012 for $100 more than the mortgage, and in 2013 I moved out and kept it as a rental. I always wanted to get into investment properties so I figured this would be a good start. I paid 200k for my next property (my residence) with a small down payment. I am kicking myself for not taking out equity of the first home before moving, and I know it wasn't the most clever thing, but it is what it is. PropA rented for what I paid in mortgage, so I am losing $79 due to HOA dues. I figured it not to be a bad deal to lose $79 given the 900 or so in equity being paid by the tenant. The house was very new and I have had very minimal repairs to the property to this point (knock on wood).
So, last year I decided I wanted another rental property. I found a Credit Union that would do the deal for very little down payment, so I bought another townhome for 85k, which pays 468 a month + 70 in HOA. so 538 total. The property came with a tenant in place paying 790 (market rents at 900 but she always pays on time, is very very clean and not once has called to complain about the property, and just extended her lease thru May 2016). So all and all, I am $173 cash flow positive between both properties.
However, I want to but a multi unit property next, to start getting higher ratios and try to improve my portfolio. However, all calculators seem to indicate that with my income of 85k, home mortgage of 1200 and car payment of 418 mean I can only afford 150k for a property. So my question is, how can I break through that barrier? I save tons of money a month (as does my wife and she has no mortgages with her name on them, only a car and 15k in student loans not yet due). We always pay on time and have very high credit scores. We study the ins and outs of deals and seem to be priced out of the very good ones higher in the food chain.
What can we do to get out of it? We've thought of selling our current home for a smaller one to get more wiggle room, but we love our house. How can I connect with people so I can move higher?