BiggerPockets

After reading some posts on this website it became apparent to me that I was reading the words of a group of some serious people who are millionaires and tough as nails. So I am excited to be a part of this board. My story is that I purchased and renovated 6 single family homes starting in 2002 using convential mortgages. I learned it all myself including the construction and landlording issues. I made around, umh 200 mistakes as my self-education unfolded but none were critical as I tended to minimize my financial and other risks. I have successfully collected rent around 380 times vs. around 5 months of vacancies so my score is 5-380. My goal is to get around 10 more homes and then I can quit my day job (engineering manager).

I enjoy being a landlord and also working on the homes. I also love to buy and fix the houses up.

I stopped buying house during the housing bubble because the rent did not cover the expenses at the bubble prices here in SLC so I saw no reason to continue purchasing (I'm not going pay for privilidge of owning real estate, I'm going to get paid for owning real estate).

So now prices are low, I want to buy, but I can't get a loan. My situation is the following:

I own six single family homes, all 4-5 bedrooms in Salt Lake City
One is completely paid for. I have modest loans on the other five.
I cash flow $3,000 a month on the homes. The homes are worth around $867K in total(at 2005 prices) and I have total debt of $467K. I own my own home outright. My credit score is 780. But I can't get a loan because I have 5 mortgages.

Can someone tell me what my next move is? I don't want a bailout just a normal loan so I can buy more rentals. I have proven I can make money and be a good steward of our capital.

Thanks,
Darren

p.s. Buy the way, I was very impressed with the way these forums handled those Neuvoe Riche scammers. I live in Utah which is the worlds capital of these multi-level marking bottom feeders and they enrage me because they take something which is an "honest profession", that of being a landlord or investing in real estate, and they make it into a scam racket which tarnishes the real serious investors with the negative image of a fast talking crook. So email me if you want me to be your mentor. Just kidding of course. :wink:

Welcome to the boards, Darren. A commercial loan may be your best bet, if you're trying to do it more or less conventionally. Usually a shorter amortization period, and a 3-5 year balloon.

You could also try for subject to, owner carry, lease/options, or other sorts of owner financed deals.

Darren,
I'd be stunned if you couldn't find a local bank to do a commercial loan for you. I strongly recommend that you start with the bank you use for your personal accounts. If you have no luck there then start with a smaller local bank. You will pay a higher rate for a commercial loan but times have changed...

Thanks for all the ideas guys. I still have no solid leads on commercial or residential loans. Remember I don't want to just buy just one home, I want to get another 4-10 homes. I can buy one home today using my $100K line of credit but I would not have the ability to refinance this home out of my HELOC into a low-risk, long term mortgage. Buying homes on an adjustable rate loans is pretty risky - Do the words subprime ARM balloon payment give you a warm fuzzy feeling?? Especially with the future inflation we are creating with by printing all this money.

I talked last night with a friend who is owner of one of the largest real estate companies in the state and the only real hope for a situation like mine now is "owner financing". The downside to that is I am shut out of the REO market where there are and will be some nice deals. I will keep pushing and see if I can ever buy real estate. I continue my calls to commercial lenders and I'm going to look at seller financing deals to see what the market is for those at this point. Another option is just focus on paying off some of my mortgages and reset from there.

Darren