How to buy more rental properties in CA

[Kamal Sharma]

I currently own a condo in the bay area with LTV of 77% on a 20yr fixed mortgage purchased last year. I am planning two more properties in the near future. One rental (somewhere outside bay area, but possibly in CA, < 240K) and other SFH (in bay area) somewhere next year.

I want to keep my current condo as the HOA has some renovation plans and it will be hard to sell in the near future.

I spoke with my lender, but they mentioned that if I buy a rental property then they will provide little loan (~500K) for SFH if I keep my current condo due to the debt to income ratios.

It would be helpful if someone can suggest me ways or strategies to buy the rental as well as SFH in the future i.e. more borrowings. Also, I am not sure, how much the lender will consider the rental income since it would be rented out for less than a year.

[Josh C.]

Those debt to income ratios are important. But they should include your rental income regardless of time. Mine did. Some banks told me two years of tax returns but you can find a smart broker to get it done.

More importantly can you really can a 500k sfh rental to cash flow? Sounds difficult.

Also, 500k isn’t a “small” loan. Geez you west coast people. :)