How many homes can I purchase?

4 Replies

Good morning BP people! I have a simple question that may help evolve my business plan that I hoping for some insight on. If I qualify for a primary mortgage of about 150k-180k, will I still be able to purchase say 10 investment homes using the 20% down method if each home is 60k-100k? I have the capital to start purchasing multiple investments, but do banks acknowledge that the tenants are paying towards said mortgages?

@Rich Cee  Based on what you described above, this is what interpret when I project the numbers out for what you have available for cash starting out:

20% x 10 homes x 60k (min. each home) = $120k.

If this is correct, I would find out what the maximum number of mortgages you are able to get with your lender (investment properties) and do the following:

1 - Let's say the max is 5, including your own personal residence (also mentioned above)
2 - Buy 2 with all cash, then refinance both of them (that makes 3 mortgages you are holding...your personal + 2 rentals)
3 - Take the money you got out of refinancing and repeat step #2 with two more homes (that will make the 5 mortgage limit)

         comes the fun part......

4 - Find a "Credit Partner".  This is someone looking to get into real estate investing that has good credit (can qualify for their own 5 mortgages), but no cash...and most likely no time to be an investor.
5 - Repeat steps #2 & 3 with them...with you providing the "Entrance Strategy" (the cash IN), and you new Credit Partner providing the "Exit Strategy" (the refinancing to get the cash out to re-use)
6 - Split the cash flow and any future profits if house is sold.
7 - Repeat step #4 - 6 as many times as you can find Credit Partners.
8 - After the last refi, whenever that would be, you refi you (original) cash out, never really ever "spending it"...just using/moving it strategically.

The answer to your original question of "How many homes can I purchase", is an infinite amount with limits based on available homes and available Credit Partners.

Joe Villeneuve

Don't forget that lenders will also want 6 months PITI cash reserves ... so you need to have money to borrow money.

@Dawn A. Not all lenders require those cash reserves. You also only need to show access to them. We've accomplished this by use of the unused balance off a business credit card (LOC) connected to the property.

I like your tagline:  "If it makes dollars, it makes sense."

Joe Villeneuve

@Joe Villeneuve  First off, Thank you for your reply. Your opinion is well respected on my side of the learning fence. Secondly, I appreciate the depth you went into about going as far as I can with what help I summon. I will copy and paste this into my records. I sent you a colleague request and I hope to learn from you and the other good BP crew.

@Dawn A.  I will keep that in mind for sure. Thank you!

Free eBook from BiggerPockets!

Ultimate Beginner's Guide Book Cover

Join BiggerPockets and get The Ultimate Beginner's Guide to Real Estate Investing for FREE - read by more than 100,000 people - AND get exclusive real estate investing tips, tricks and techniques delivered straight to your inbox twice weekly!

  • Actionable advice for getting started,
  • Discover the 10 Most Lucrative Real Estate Niches,
  • Learn how to get started with or without money,
  • Explore Real-Life Strategies for Building Wealth,
  • And a LOT more.

Lock We hate spam just as much as you

Create Lasting Wealth Through Real Estate

Join the millions of people achieving financial freedom through the power of real estate investing

Start here