How I Went From $0 Net Worth to Qualifying for $1M in Real Estate Financing in 2.5 Years

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I just talked to a lender that prequalified me for over $1 million in financing. This is a conventional mortgage broker—not a friend, not a family member. This is a loan at the best rates available.

That’s $1 MILLION.

I don’t earn a ridiculously high salary, and I don’t have a tremendous amount of cash.

In this article, I want to talk about a reward that I did not foresee when I started investing in real estate. I want to talk about how I went from a position of approximately $0 in net worth just two and a half years ago to a position in which I am able to single-handedly purchase around a million dollars in real estate, right now, using conventional or even FHA financing.

For the foreseeable future, at least until I screw up badly or the economy collapses, I will have no problem getting access to real estate financing. This is in sharp contrast to most of my white-collar peers, for a reason that I will convey below. Please note that this article is written for investors who aspire to build real estate wealth while working a full-time job, not folks who are more on the “entrepreneurial” side of real estate investing, who fix and flip, rehab, or manage properties full-time.

See, the two things that hold most would-be part-time investors back from investing in real estate are their cash position and thus their access to financing.

In my opinion, accumulating cash is actually not too difficult. I chose to do it by systematically saving $20,000 of my first year’s wage income of just under $50,000 per year (yes, after paying taxes on that income), working hard at my job and changing jobs to earn more money over the last few years, and investing passively in index funds. While that may sound hard to some people, the fact of the matter is that pretty much anyone who works a median income job in a city that isn’t LA, SFO, or NYC can give themselves a great shot at saving up the down payment on a rental property in under two to three years. It could take less than one year if they house hack, as I did here in Denver while earning less than $50,000 per year. For example, conventional lenders will typically only lend to first-time investors if the investor can bring 15-25% down (15% on a single family rental or a duplex and 25% on a triplex or quadplex). That’s $45,000-$75,000 in cash on a $300,000 property. That’s a challenge for many people, but not for a big saver with a few years in the workforce.


Why Many People Can’t Qualify for a Rental Property Loan

If you are a saver, you will eventually have no problem coming up with the cash to put 15% to 25% down on rentals with conventional financing. But if you make the choices that many Americans make with regards to consumer spending and the purchase of a first home that stretches you to your financial limits, you will be hard pressed to make a significant rental property investment in the next few years.

What does this mean in reality? Consider the following example:

Joey makes $85,000 per year and has $40,000 in lifetime savings outside of his retirement account. His lender tells him that this qualifies him for a maximum mortgage loan of approximately $400,000. The reason he is qualified for that amount, at maximum, is because the debt service, including principal, interest, taxes, and insurance, on a $400,000 loan is about $2,500 per month, or roughly 35% of his monthly paycheck.

So what does Joey do with this information? Well, he buys a $440,000 primary residence, putting roughly 10% down, and stretches himself to his absolute financial limits to live in the best home he could possibly purchase. Unfortunately, this wipes out his ability to save cash (a huge chunk of his paycheck goes to his mortgage), his current cash position (used for the downpayment), and his ability to get access to future financing (his debt to income ratio is maxed out, and lenders will no longer offer him credit unless he increases his income)!

Fast forward a year or so, and Joey now decides that he would like to achieve early financial freedom in part through real estate investing. He goes to his lender, and his lender tells him this:

“I’m sorry, but you will need 15-25% in the form of a down payment AND enough income such that you can cover both your home mortgage AND the rental property’s mortgage. It may be quite some time before we can offer you a loan for a rental property – come back to us in several years when you’ve saved up enough to get started.”

Joey is in a really bad position to begin investing in real estate. The reality of the situation is this:

If Joey wants to buy a second $400,000 property as a rental, he will need to accumulate $60,000 to $100,000 in cash to qualify for a loan. 

Folks, this is the position that many BiggerPockets readers are starting in! They earn solid salaries, but have little cash accumulated and debts, like a mortgage, that inhibit their ability to borrow. Joey is forced to buy tiny rentals to get started, rentals that will have little impact on his overall financial position and that may not be available or desirable to him, depending on his location. These rentals will produce income and wealth that is insignificant relative to his wage income and are more likely to annoy him than encourage him. Unless Joey has equity in his home and is willing to leverage that to invest, he is a long way away from building significant passive income from real estate.

Related: The Tax Implications You MUST Understand Before House Hacking

The Less Painful Route to Bank-Financed Rentals

But, I, Scott Trench, have avoided this predicament.

How, you ask?

By buying my first home as a house hack.

Unlike our poor friend Joey, I do not have any trouble accumulating cash or getting access to future financing. I’ve saved thousands of dollars per month compared to folks like Joey for years by house hacking and having my tenants cover all of my mortgage. I have passive real estate income. I have cash AND access to financing, all I could want.

When I go to the lender, you know what he tells me?

“Mr. Trench, I see that you have a wage income of $______. This income qualifies you for a mortgage of hundreds of thousands of dollars on its own as an upper-middle-class wage-earner at a respectable corporation.

Additionally, in your case, your current mortgages do not count against this income because the payments, including principal, interest, taxes, and insurance, are wholly offset by the rents your current properties receive. In fact, because we allow 75% of the gross rents your properties command to count towards your income, your current properties actually increase your ability to borrow.

Let’s add an extra couple hundred thousand dollars to your purchasing power.

Oh, and Mr. Trench, I forgot to mention. Did you know that because you are landlord with two years of experience, verified by your tax returns, that you can actually use the expected rent from a future property to count towards your purchasing power? That’s right, if you buy a property with four units and each unit is estimated to command $1,500 in rent, we can tack on 75% of that rent (or $4,500 in monthly income) to help you qualify for a loan?

Let’s add yet another extra couple hundred thousand dollars to your purchasing power.”

My eyeballs exploded when I saw the amounts that my lender was willing to offer me for my next purchase(s). I can, right now, buy property at well over seven figures in value (using a combination of low-down-payment loans like FHA and 5% down conventional), assuming I house hack (move in and put down 3.5%-5% on one very expensive quadplex and purchase one much less expensive duplex or single family). Of course, I plan to remain conservative and am looking to purchase properties under $600,000 this year—but wow!

Financial Freedom the Easy Way

I, with my experience as a house hacker landlord, find it very easy to get a loan at a great interest rate. Shockingly easy. Joey will find it extremely difficult. My ability to buy real estate is perpetually increasing and is, at this point, basically limited only to what I can bring to the table in cash, cash which is relatively easy for me to accumulate with each passing month due to my low expenses from house-hacking, and rental income from my previous property. Joey cannot get a loan without another co-signer, unless he can convince a private lender to give him money, likely on unfavorable commercial terms with high rates and origination fees. Joey is limited by his inability to save and his weak cash position. I am not. Joey may never get started and will have to fight very hard to get his business off the ground. I can offer on property worth more than Joey’s house every single year if I like.

Had I not house hacked and used my first large loan to help me generate rental income, I might be in Joey’s position struggling to save and earn more. My first rental purchase would likely be years away and/or a very small property in a less-than-desirable area (unless I was willing to sell my home and start over by house hacking–unlikely if I was settled into my home). I would not believe myself to be “conservative” in looking to purchase property priced as high as $600,000. I would not have the option to purchase property approaching or exceeding seven figures in value.

This is not an argument against buying a nice home. I intend to buy a nice home one day. But that purchase is at least a few years away. I’ll buy the fancy home when my house hacking income can easily cover the mortgage payment. My argument is to delay the purchase of that first home, at least for a few years, while one becomes a landlord the easy way, through house hacking. Or, at the very least, buy a home at a price point so conservative that you could easily buy two, and make a second property as a rental.

Related: Am I Missing Something, or Is Real Estate Investing Really Not That Hard?

Get the process started with a rental property that cash flows reasonably before buying a long-term primary residence at the upper bounds of your purchasing power. Put in your first year or two, and watch opportunities multiply in front of you. Do whatever you need to do to buy a solid rental property, large or small, and put yourself in a position where you can use the rent from your current and future purchases to help you out with your next purchase.

Then, when you have passive income, plenty of cash, and a proven track record, buy the nice home if desired.

If you can get started and set yourself up over the next few years such that you can save thousands of dollars per month and use your current and expected future rental income to purchase property, you may find real estate investing to be easy, fun, and automatic rather than something almost unattainable. Too many folks on BiggerPockets are spinning their wheels trying to get into real estate investing because they used up all of their purchasing power on a primary residence. In fact, the only set of circumstances that allows folks who buy their first homes to invest is when they experience a lot of appreciation on that home very quickly. That’s a big gamble to take, and that financial benefit would only be exaggerated if it were a rental property. If you do decide to max out on your first home purchase, you might find that financial freedom through real estate is decades farther away than it needs to be.

Looking to set yourself up for life as early as possible and enjoy time on your terms? Scott Trench’s new book Set for Life, slated for release April 23, 2017,and can be preordered on Amazon, Barnes & Noble and other fine booksellers! Whether you’d like to “retire” from wage-paying work, become less dependent on your demanding nine-to-five, or simply spend time doing what you love, Set for Life will give you a plan to get there. This isn’t about saving up a nest egg. It’s not about setting aside money for a “rainy day.” Set for Life is an actionable guide that helps readers build the accessible wealth they need to achieve early financial freedom.

Has access to financing been an issue for you as you start your investing journey? Any success stories related to house hacking?

Let me know your opinions and experiences below!

About Author

Scott Trench

Scott Trench is a perpetual student of personal finance, real estate investing, sales, business, and personal development. He is CEO of, a real estate investor, and author of the best-selling book Set for Life. He hopes to now share the knowledge he has acquired with others so that they will have the tools they need to repeat his results in just 3-5 years, giving them the option to go anywhere they want in the world, work any job, start any business, or finish out the journey to financial independence and retire young. Scott lives in Denver, Colorado and enjoys skiing, rugby, craft beers, and terrible punny jokes. Find out more about Scott’s story at, MadFientist, and ChooseFI.


  1. Cory Binsfield

    Scott, amazing post. This is exactly how I built my portfolio to 116 units. Too many people try to own their dream home first versus building a portfolio that can finance their dream with rental cash flow.

    Now go find a 4 unit!

    • Kareem Sykes

      Great article indeed! After looking at several properties, I found a 4 unit that requires what I believe are mostly reasonable cosmetic repairs aside from needing HVAC throughout the property, and a kitchen sink/cabinets installed in one of the units. I reached out to my credit union only for them to tell me that because its multi-unit (as opposed to SFH) that they would only finance 80% of the loan which means I need to come up with the other 20% which although the property is only 90k, I don’t have the cash up front no to mention closing costs….

      My question is: as a newbie investor who does NOT OWN A HOME, and a 36 year old professional who works as defense contractor making a low 6 figure income who has $6k in credit card debt, a student loan of 44k, a 712 credit score and a burning passion to get in to real estate investing (buy and hold rental units) how can i get a bank or some other lending source to finance me for the entire cost of the purchase price? I can come up with closing cost if need be.

      • Kristopher Allen

        For this, have you tried talking to a family member or a friend that might be able to spot you some of the upfront costs?

        Even hard-money lenders (HML’s) would want you to put down 20% of the purchase price as a guarantee that you’ll put in the work to turn a profit for this property. You can also maybe get a line of credit or a signature loan from a bank since if that’s all the debt you have AND you have a high credit score, you should be able to qualify for one.

        The HML’s does not really care where you get the money from, as long as you do your due diligence and can show and prove this 4-unit will guarantee positive cash flow for you, by running your comps, calculating the cap rate, etc.

        Once you do that, DIY’ing the repairs would save you tons of money as well. And looking at habitat for humanity stores, etc for a complete kitchen cabinet set you can get discounted. When you say HVAC needed for the property, does it have radiator heating and window AC units at least? You can wait on upgrading that once you have some money stashed away. As long as the place is well-maintained, freshly painted, granted you won’t be able to charge a premium just yet, you should be able to land tenants as it is.

  2. Rich Becker

    Scott, liked the post, just want your thoughts on my first potential deal so i don’t end up like Joey. I am currently renting near NYC with the intention of house hacking a multi family with my finance in the next 6-12 months. We both make above average salaries for our area. Currently, before I do my primary residence house hacking months from now (because why wait almost a year), I am seeking another pure non-owner occupied investment property with financing via either 50/50 partnership with a family member or just a private money loan from that same family member for the down payment (20% down) for a conventional mortgage and rehab costs for the property. The plan would be to ultimaitely either refinance on that original loan and pay back the private lender or keep the same loan and slowly pay back the private lender over time with cash flows (terms are very flexible bc of relationship). Any thoughts on what can go wrong when planning to buy this primary house hacking duplex a year from now? I don’t foresee any issues with getting a 3.5% FHA for the duplex in the short term with both of our strong W-2 wages. Please let me know your thoughts! Don’t want to be a “Joey”. LOL

    • Brandon Brown

      I would stick with house hacking for your first deal. The other scenario you describe adds complication which could hurt you in your future investments. I learned a lot about landlording while working a regular job. I am happy with my slow start, also my start has put me in a strong position for future investing. Just my 0.02 cents.


    • Scott Trench

      Hi Rich – thanks for the comment here. I think that this is a personal decision, and that it’s fine to get creative with your structure in terms of how you go about investing. I will say, however, that you should probably consult with your lender (or maybe several lenders) about this. One thing you don’t want to do is make an uninformed choice that results in rental income not appearing under your name, when that might limit your opportunities down the line.


  3. Brandon Brown

    Great post! I just finished house hacking a duplex in Nashville and am looking for my next deal. When I moved out I had a new renter in the same week.

    I make a pretty decent salary and have saved a large down payment for my next place but the only problem is my wife wants to buy a house. I see this as the turning point in our lives. If we can hold off on that new home for a couple more years and buy a quad-plex or small apartment building, our rentals can potentially pay the house payment and accelerate our wealth building. I haven’t got pre-qualified yet but I don’t want to blow all my buying power on my personal residence. How long does an investor put off buying a personal residence?

    Joey situation is when your home is a liability not an asset.


  4. Just a question. Do bank see the monthly incone that came from thw rental or also whay you put in lossess in the property? For example i been a landlord already for my first property 2 years now. For the sake of saving a bit more i added some losses in repairs to that property, does that mean the banks will only take what you got in income from rents minus all losses? Lossess like spending 5k in improving or fixing the property. I think i got in rental about 18k and to cover mortgages snd taxes its like 15k, throw on top of that 5 to 6k in repairs etc… how do banks see this?
    Thank you.

    • Scott Trench

      Andy – I try to accurately report losses and expenses. However, you may want to talk to your lender and accountant about this. You want to be careful of the following scenario for instance – you claim expenses on the proeperty that wipe out all your cash flow and create a situation where the lender will no longer lend you money. In that case, you may wan to make sure that you are correctly categorizing the expense – such a large repair bill might need to be capitalized instead, and depreciated over several years. That’s where a good Accountant and some base understanding of real estate related bookkeeping and accounting come into play.

      • Thank you, my mind set and our accountant is set to save us money instead of looking for a much larger loan. I may be shooting myself on the foot for it. I would have to talk to a mortgage lender and see what they tell me i bet the less losses the better, makes sense. Thank you.

  5. Great article; quick question if you started with those class D properties and at the end of the day your accountant tells you that you are breaking even or some months loosing money. And all these properties are under a S investment corp. does that also count towards the two years of landlording in a positive way? Or does it have to be under your personal name to count in your favor?

    • Scott Trench

      Felix – you will want to ask a lender about this one. My guess is that if the properties are under an entity that you manage personally, or particularly a pass-through entity like an S Corp or LLC, that rental income will count. However, if you are financing the property through an entity, then it’s likely that conventional financing will not apply to you. Conventional loans cannot be backed by entities in most cases, and you risk triggering the due on sale clause when you move the properties.

  6. Thomas Jones

    I have the ability to rent out my current single family primary residence right now and by using 75% of rents can qualify for around $300,000 in traditional financing for another property. If I stay in my home I can qualify for around $170k traditional financing.

    I’ve been mulling over how to start landlording. I was thinking to rent my current home and buy a new one. Live in the new one for a good seasoning period 12 months and then rent that one out.

    Side note- I have 3 daughters under 5 years old ?

    Any thoughts or advice much appreciated.

    • Scott Trench

      Thomas – I think that the key in your situation is to simply start collecting rental income from properties that you own or manage as soon as practicable. The sooner you start doing that the sooner you will be able to claim a two year landlord history and get better access to financing.

    • Scott Trench

      Ihe – no, this is not a crazy accomplishment. That’s the point! I, as a regular, upper-middle class income earner that simply saves some money and has been investing in real estate the easy, slow, boring way, have access to incredible amounts of financing. Most people with similar incomes can’t. It’s because they haven’t done the easy stuff necessary to put themselves in position to develop a landlording history and get access to financing.

      My accomplishments have not and probably will not come in the real estate investing world. I work hard instead at my job, live frugally, house-hack, build up cash, and month by month snowball towards financial freedom, and I’d argue that folks in a position similar to mine (excellent job, 3-7 year plan towards early financial freedom) would do well to work towards it the easy, low stress, systematic way. This article is written for those folks, and seems like it helped some people in that position.

  7. Armonty Houston

    Wow, this really got to me. I’all almost debt free and will save thousands of dollars a month shortly. I don’t even own a house and rent cheaply. I was just thinking about how I’m tired of living so far below my means, strictly budgeting, and driving a crappy but “reliable” car. I just want to have an ignorantly blissful moment and go out and finance a 45,000 dollar mustang gt and giant house that I don’t need just like everyone else!

    But this article has really snapped me back to reality and gave me some motivation. I’m glad to be on the Scott side of the spectrum vs the Joey side! Thanks for his motivation, it was much needed! MOTIVATED DEDICATED!!

    • Scott Trench

      Thanks Armonty! I’d argue that if you are in that excellent position that you shouldn’t buy yourself a car — instead, finish out the financial journey and set yourself up for life, so thtat you can make that solid income without having to work at all! THEN, if you feel like it, buy the car and the house, with cash. This can be accomplished in just a few more years of hard work, strong savings, and creative investing or business building. By that point, those expenses will be a pittance, and you may find you don’t even want them anymore.

  8. Rachel Luoto

    Wow, thank you Scott! I earn a similar amount and it is very encouraging that, with a little patience, I can scale my business – literally closed my first deal yesterday, and my boyfriend has his first under contract.

    Further ideas for getting that additional income: renting out a room in someone’s personal home, or air bnb income? I’ve been on both sides of each.

  9. Trenton Parks

    Do you still have to subtract PITI?

    In your example you would have the 4500*.75 = 3375

    Then you would have to take the 3,375 – PITI to get your additional income?

    So lets say PITI is 2,000 per month, would end up with 1375 per month in additional income to qualify ?

    • Scott Trench

      My understanding is that it’s just the gross rents. So, if 75% of your Gross rents cover the expenses of the property (including PITI) you’re good. If they don’t, they simply don’t allow you to qualify for financing on their own. Still less bad than having a mortgage with no income to offset the payment, such as in the case of a homeowner.

  10. Max H.

    Hey Scott, awesome story! Quick question was your first home a duplex or SFH? I’m assuming it was a duplex but I ask because I currently own a SFH that I rent out two of the bedrooms to my buddies. Do you think this would fall into the same category as your situation?

    • Scott Trench

      Mine was a duplex. Renting out additional bedrooms is great too! I just think it’s wise to make sure that the property makes sense as a standalone investment property. So, if you could move out and have a stable, cash flowing rental, you are setting yourself up nicely.

  11. Tobias Madigan

    Nice article. So I’m currently making about 90k per year with an Airbnb management business that I own. I have no loans. I have 50k plus in savings. I can qualify for probably 400k. My question is what to do? Can I find a property with a decent return on my investment to create passive income? Certainly not where I live in SoCalz.

    • Scott Trench

      Tobias – SoCal is tricky. It’s possible that the reason you make $90K per year is because you live there. That income may come at the cost of other wealth building options that are readily available to folks in much of the rest of the country as far as real estate is concerned. You will have to be creative and network locally if you want to build passive wealth through real estate in your area.

  12. Com M.

    Great article Scott!

    I definitely started as a “Joey” and its been rough building up. Maybe your next article can be on what so many that are in that exact spot can do to work their way out of the small hole they have dug themselves into.

  13. Shaun Spalding

    Great post, Scott. In addition to doing what you’re doing, look into obtaining an individual line of credit from your bank to use as the down payment. As long as the rental income covers the payments on both the loan and the line of credit, then you can purchase your next 4-plex without dipping into your savings.

    I was able to obtain an unsecured line of credit and used a portion of the line of credit to cover 25% down, closing costs, etc. and my loan paid for the rest of my most recent 4-plex. The rents cover payments for both and all as write offs. May be a way to really supercharge your savings, help buy more rentals, or get you to your dream home sooner.

    Thanks for the post.

    • Scott Trench

      Thanks Shaun! I think that’s a great idea, as long as the cash flow is strong. Don’t want to overleverage to the point where there is relatively little cash flow and the properties may not be able to maintain themselves financially.

  14. Joe J.

    I would like to know more about how you found a lender willing to consider your rental income as income, not a ding on your DTI, etc. My wife and I have four years of landlord experience on an SFR (with three full tax years filed now) and excellent credit, W-2 income, etc. and still couldn’t find anyone to lend on another small SFR, let alone offer us $1 million in credit… we ended up doing a HELOC on our primary residence, which we own free and clear. Cheap, but I sub-optimal.

  15. Tim Niemela

    Hi great article and somewhat similar to my situation… I’m curious how I will be treated moving forward as I own a non conforming duplex(zoned SFR, but permitted 2nd unit) renting the other unit covering mortgage. Loan is seen as owner occupied SFR but I am financially in a better position then before I even bought the place with 2 tax returns to show. will I be able to get financing easily for future rentals? what are my best options?

  16. Dan Bryskin

    “I’m sorry, but you will need 15-25% in the form of a down payment AND enough income such that you can cover both your home mortgage AND the rental property’s mortgage. ” – Scott, they also like to ask for reserves. Don’t leave them out, you making it sounds too easy 🙂

  17. Stacy Levi

    This deserves a big thumbs up because I have followed this same plan. Bought my first house in a B/C neighborhood in April 2016 because I never thought of living in it forever (5yrs max) and I don’t need a big house in a great neighborhood to show off for people that don’t matter. I also just bought a Duplex this past Feb. People around me think I’m rich but it’s all about thinking smart.

    One of my Duplex tenants has paid one year in advance that covers the entire mortgage this year so I’m sitting pretty… Lol.

    My plan is to buy one house a year through loans and possibly cash purchase if I find a great deal. My ultimate goal is to have 10 income producing multifamily homes and then and only then will I buy my dream home but until then I’m living below my means to live my dreams.

  18. I think you just stopped me from making a huge mistake.

    So if I decided to house hack a tri-plex or four-plex, I can get in with a standard mortgage. If after a year, I choose to buy an investment four-plex, still W2 employed, with income from my first purchase, will a lender count the rental income from the current tenants of property #2 towards my entire income?

    • Scott Trench

      Thanks Katherine. Yes, you should be able to count your income towards the next purchase. If the 75% of the gross rents are greater than your financing and operating expenses, you are likely to see an increase in your purchasing power. I’d just keep in touch with your lender and run things by him or her throughout the process, so you are fully informed on the specifics of your situation.

  19. Max H.

    Awesome, Scott! Quick question for you – I’m assuming you did this with a duplex, I currently own a SFH that I live in and I rent two of the bedrooms to my buddies. Do you think lenders would recognize this as a true rental?

  20. Will Horn

    So I have a question – I was very fortunate to inherit a home. It’s a home passed down through a few generations, 95+ yr home, showing it’s age but paid in full. So far as I know, there’s no major structural issues to address, just cosmetic/restoration improvements.
    My new wife and I are living here now, updating as we can on our own. How can we use this to help leverage our position to take the plunge and start into property investment?

    • Scott Trench

      Will – this is very fortunate indeed. It seems to me that you have several options:

      1) Live there and enjoy the lack of a mortgage payment, and save voraciously.
      2) Rent out the property and buy another house-hack to expedite your position.
      3) Sell the propery and invest in true rentals if they would produce a better return.
      4) Refinance – take out a loan on the property, and use the cash you take out to invest.

      All are good options. Props to finding yourself in an advantaged situation and looking to make the most of it!

  21. Hi Scott, a great article I too am a believer and did this startegy 15 years ago. Been out of the game lately and wondering who are you using as a lender/mortgage broker to give you credit lines and approvals. Much appreciate the advice and contacts..


  22. Tim Czarkowski

    Great article and advice I did the same when I started I bought a large quad and lived in one unit for years. I recommend the process to everyone I know but most people just have to have that nice home and new car. Meanwhile I’m financially independent and drive a 99 F250 diesel I bought for 6k. More people need to see the bigger picture of what their future could be like. It wasn’t even much of a sacrifice I lived in a beautiful 2000 sq ft 1914 craftsman style home in a fantastic neighborhood with prices booming the last few years, but it also has three other units attached. I did of course buy it around 2008 which was when the market was starting to bottom and got a great deal from some kids who didn’t want their father’s building. Negotiated the price down from 400k to 315k. That one building has appreciated to 550k or 600k,not to mention my other properties. I now have enough money coming in from my rentals and managment that I could cover all my expenses without my wife working at all, of course I’m going to keep growing though 😉 I’m planning to pick another up this year once my taxes are filed. It’s easy when you’ve got plenty of cash, good steady cash flow, incredible credit, and incredibly low expenses for someone in my wife and I’s position. I didn’t know they were applying future rent to your income again, thanks for the tip 🙂

  23. Adrian Stamer

    I will be the negative nancy and point out that prequalifications are rather simplistic calculations and are not what the underwriter actually does who is the person who really decides yes or no on your actual loan.

    Part two is people were also offered a ton of easy money back in 2006 and we all know how that ended up 😉

    • Scott Trench

      Thanks Adrian – you are absolutely right. I maintain communication with my lender and am always sure to inquire about how various changes might impact my ability to qualify. I also pan to be FAR more conservative than my financial position might otherwise allow. Thanks for the tip!

      As for the 2006 situation, you’re right. It could lead to some problems down the line. My solution to that is to maintain a strong financial position at all times, with plenty of cash on hand, diversified income streams, and put myself into position to get access to financing in the event of a downturn through whatever means possible.

  24. Yan Perez

    Great post, I need an advise, I only have 3 Month in United States, I am legally here but until April 2018 I’m not be able to have my green card. I’ve read that the bank ask more than two years here, for qualify for a mortgage Lend. Anyone could recommend me some Leding mortgage companies for non united states resident???? Thanks

    • Scott Trench

      Hi Yan – I am not an expert on this. Have you talked to a conventional lender just to get the ball rolling? You may find that if you have a great financial position, that a good lender can make it work or point you in the right direction!

  25. Christine Barbacki

    Hi Scott, fantastic article! I’m curious to know, does the additional buying power from renting out your properties apply to nightly rentals as well? We’ve just bought our first property that we will be renting out nightly, and are considering doing the same for a future primary residence (one property with two fully separate suites).

    Going through the financing process was a lot more difficult for the nightly rental than it would have been on a year-long lease, so I’m wondering if 2 years of consistent nightly rentals would give us the same leverage as 2 years of year-round renting.



  26. Tyler M.

    Great article! I am working on building my assets with a similar strategy. I just purchased my first “house hack” last November. Does anyone know of lenders that will include your rental income when determining your loan amount after less than 2 year of landlord experience? Does this mean 2 years of tax returns in which you report rental income?


  27. What would you suggest for someone that already owns their home outright 100%. I’m 37 already own my home but want to get into buying properties to rent. What process would work then?

    Clearly i dont need or want to live in any property i buy to rent as I already have my home paid off. In my area its mostly single family, occasionally duplex or condo units.

    Your article was great btw.

  28. Nelson Diaz

    Hi Scott, thank for your road-map is excellent. I already did something similar fifteen years ago. I now own my home free and clear as well as a condo In NJ, but I’m retired and would like to buy and investment property to supplement my eroding fixed income. I’m considering a nice duplex (my wife variable) with FHA financing. Any suggestion.
    I’ll appreciate your comments

  29. Coby Lefkowitz

    Hey Scott-Great article!

    I may be under a false impression, but are you able to receive a low money down (~3.5%) FHA loan if you already own multi-family investment properties? Or so long as you occupy the residence it doesn’t much matter.


  30. James Rutan

    Scott, I loved this article and your book. Just one question; how do you keep your hands “out of the cookie jar” while you’re accumulating for the next transaction? Being frugal only works until the rice and beans taste like cardboard.

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