Multiple SFH rental properties- financing question

[Teage Staunton]

I currently own one SFH that I rent. I lived in it before I rented it so financing was simple. I am now interested in buying a property solely for renting (already has a tenant); my problem is that I don't have a lot of cash to play with. My bank requires 20% down on rental purchases while only 3.5% on a primary residence. They are also requiring that I show finances to back 6 months of both mortgage payments in case they are vacant. My question is for people who own multiple properties- do you all pay the 20% down on each property you purchase with only rental intentions or is there something I'm missing? What are some other options instead of paying 20%? Very new to real estate so any information is greatly appreciated!!

[Max T.]

You can buy as an owner occupant several times, first with 3.5% down (FHA) and then 5% down (conventional) after that, but you will have to live in each property for at least one year, and you can only do this about 3 times before the banks catch on.

Plus, if you buy sever properties with little money down (and don't refinance after adding value) you will have a high debt to income ratio and that will disqualify you from future loans.