Loan Qualification on second mortgage

[Daniel Lambert]

Hello all, 

My wife and I were so close to buying our first duplex to begin our portfolio. However, we backed out of said deal because we found out we would only qualify for a certain amount of money on a second loan that was way too low for the market I live in. Basically, if we bought the duplex, we couldn't qualify for another loan that would let us buy another duplex or even a single family home. 

Have any of you had similar situations? My wife and I did not want to be "stuck" in the duplex for longer than we needed to be in pursuing the growth of our portfolio. The duplex would have been way too small for our family to live in for more than a year. And all the duplexes that would be big enough is way too expensive and wouldn't allow us to cash flow and still would cause us to not qualify for another loan. 

Any help would be great in how we can move forward.

[Jacob San Luis]

I have helped clients in a similar situation before, and it can be really frustrating. One strategy that worked for them was to look for a partner or investor who could help fund the initial purchase. This allowed my clients to buy the duplex and then use the rental income to improve their financial standing, making it easier to qualify for future loans.

Another option is to consider properties that need some work but have good potential for value appreciation, as these might be less expensive and provide a better cash flow once renovated. 

Additionally, you could explore creative financing options like seller financing or lease options, which can provide more flexibility without immediately impacting your loan qualifications. 

Keep exploring different avenues and stay persistent; I'm confident the right opportunity will come along.