Hello all. I have been researching realestate for over a year now and I have still not found my first deal. I have 120,000 cash to spend on realestate. I own my home which has 80,000 in equity and I have 20000 in cash reserve on top of the 120000. I have done a ton of reading. I am interested in rehab as I am a contractor and can do some of the work myself. I am 26 work full time and run a part time business on nights and weekends. I also want to do buy and holds. I like the Idea of the brrrr. My question is how can you refinance more than 4 properties? From what I have read is you can't have more than 4 mortgages. Is this true? I have looked at a lot of houses just can't pull the trigger. I would love to find a mentor local to me and I think that would ease my mind. Any help would be appreciated. Thank you.
It sounds like you are in a great position to get started!
You can have as many mortgages as your debt to equity and income will allow. Your local community bank will help you with that.
With secondary market (FHA or Conventional) mortgages, there are limits to how many you can have. Another BPer might chime in with the exact count. Or, you might check with your local mortgage originator.
I really like the BRRR strategy too. I think you're on the right track. You might use the BP deal calculators to help you get over the hump and pull the trigger on a deal.
I was going to say 'welcome to BP', but then I noticed you've been here for a while. So let's get right to your issues.
Unfortunately, I'm not local to you, so you'll have to keep looking for someone local. It would have been fun though. From your profile it looks like your experience in construction is mainly in electrical, like me. Here's what I want to say about that.
So, you have experience in construction and you're figuring that you could put your hands in the mix to save on expenses. I would advise against that. Instead use your experience to manage contractors to do the work. There's nothing like having direct experience to keep the contractors from trying to BS you. But in the end, your business will never be scalable until you let go of the minutia. Your time will be better spent finding more deals.
Now to the issue of mortgages. If you're doing rehabs, you're probably not going to run into a problem of carrying more than 4 mortgages for a while yet. I would expect that you're going to buy one, rehab it and get it rented, then buy another, rehab, etc. By the time you have four properties to worry about applying for the fifth mortgage you'll have plenty of time to work that out.
What I'd probably do, however, is to refi all four properties after I'd seasoned them with a portfolio lender. I'd hold the portfolio loan in an entity. The retired original liens would come off my credit and then I could start buying more mortgages in my own name. You might even start out by talking to a commercial lender. It's a very smart thing to ask this question well ahead of your need, but don't wait for the answer. Start finding those deals so that you have live problems to solve.
If you haven't found a good deal, then it's a damned good thing that you haven't pulled the trigger yet. It sounds like you need another set of eyes to vet the deals you do find. I'll tell you what, find something that sounds juicy, then come back to the forums. Ask for help evaluating the deal. You don't have to give the property address, but bring the financial details. Send me a PM if you want a better explanation of what I'm talking about.
It's easy to pull the trigger when you know the deal's what you want and you know you have the means to execute. So, if you're still afraid, it's nearly certain that you're missing one or both of these confidence points. Fear is the only problem, but the solution to that is simple. Ask how I know.
Tom Mole | [email protected]
I have come to BP for some evaluation advice with little response. I think I don't want to use to many other contractors because I am much more hands on then I am book smart. I don't know finance and I don't know investing to well. I have been sitting on money for years and it's in a savings account making nothing. That's why I want to find a mentor who has been there and done it so I know I'm making the right choices. I don't want to learn the hard way.
Also, when I bought my house I had paid cash. So I have never had a mortgage and I don't know anything about loans. I figure I shouldn't have a problem getting a loan with a 760 credit score and with my equity. I'd love to learn more about loans. Also, I do not know how to tag anyone on these forums
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