Does anyone here have enough units/properties that it allows to be their full time job? I am not talking about those that have already had a career and retired. I am curious how financing works once real estate investing is full time job for someone. For example, what would an individual have to do in order get as many properties as possible and not be cut off my mortgage limits. I have heard that through commercial loans there is no limit.
Any feedback appreciated.
It would be very difficult to start out as a full-time passive investor without utilizing commercial loans.
It does depend on the types of properties you invest in - I know of a guy here in Louisville who invests in one area of town where properties are worth about $40-$60K. He buys them at $30K anytime one comes up and owns his portfolio outright (no leverage). He has well over 100 of these units producing $500-$600/mo in income so purchasing another is never a problem.
I'd say you either need to be able to buy with cash (or private financing) or utilize commercial loans. The income limitations with conventional loans are not nearly as big of a deal as the fact that you cannot exceed 10 loans.
The number of properties you purchase is not a good metric. Assuming the typical SFR is 40-60k appraisal value and rents for 650-800; you could control SFRs all leveraged at 80/20 with 20 year amortization and would be netting 100-200 per unit (after CapEx, Vacancy, insurance, and repairs). To make $2,000-$3,000 a month you would need 10-30 units.
Risk would be high...
- Just one insurance claim in excess of a $5,000 deductible could sink your battleship if you do not keep cash reserves.
- You still need to pay for your own health insurance
For every unit you own outright you get an additional $400 or so in income. Now you can do the math to determine what you need based on your current position.
How many properties/units do most on this network own? Anyone on here with 100's or 1000's of units? If so how did you get there?
There are lots of way for what you're talking about to happen; portfolio lenders, blanket loans, commercial lending, seller financing... You can use the search bar at the top of the page to research previous forum discussions on any of these.
I'm sure there's no way of assessing what "most" on BP own. The membership runs from people researching their first possible purchase to those that have been in the business for decades. And yes, there are folks that own hundreds to thousands of units. Some of them are comfortable with discussing their number of properties publicly, some not.
Jean Bolger, 33 Zen Lane | http://www.solidrealestateadvice.com
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