How many mortgages are too many??

Question

So, I’ve acquired 4 rentals over the last 2 years. Including my primary residence I now hold 5 mortgages. How many is too many? I want to grow exponentially but I’m hesitant to keep buying with 20% down conventional loans (which is what all of my properties were bought with).

What say you?

Salvatore Lentini · Answer

Hi @Vincent Plant - Do you mean your hesitant because of risk?  If that's the case, put more down and/or find properties that cashflow better, or are in appreciating areas.  Or if you just mean you don't want to go the conventional route anymore because of how slow and strict they are there are lenders out there that only work with real estate investors.  They are much easier to work with.  That's how I grew my portfolio beyond the first 5 single family properties I had in the beginning.  Establishing a strong and varied source of investor friendly lenders is key to growing a large portfolio.

Theresa Harris · Answer

@Vincent Plant  It isn't the number you should worry about as much as the amount of the mortgages.

Rich O'Neill · Answer

@Vincent Plant there’s a lot of information missing in your original question. That’s like asking how many cars is too many to own. Do you live in NYC? Then 1 is too many. Do you love to collect cars? Then the limit doesn’t exist.

Are you talking about how many conventional loans can you get in your name? 10. Are you talking about from a risk management standpoint? The limit does not exist in my opinion as long as the property truly cash flows and there’s a reasonable expectation you aren’t buying at the height of a bubble. I don’t think mortgages themselves are risky, I think bad deals are risky.

As for the 20% down method, you could start using OPM to expand. You could start to BRRRR to expand. Or if you make a sick income, live frugally anyway, and love your job then the real estate your buying is likely a great savings vehicle.

Kenneth Garrett · Answer

@Vincent Plant

I agree with @Theresa Harris everyone will max out at a certain bank.  Even on the commercial side for example you have $750,000 max loan amounts.  The bank will be careful about how much exposure they are willing to take on with a single individual and or company.  The number of loans plus the amount of the mortgages all account into the calculation.

Rick Patterson · Answer

Never too many if leveraged properly. you will max out at 10 conventional loans. 20 if married i think. There are great rental loans out there but you will need 20% down for turnkey. If you are willing to put in a little extra work and renovate homes, you can do less of a down payment because it’s a short term loan based on future value and than refinance into an investor friendly loan. Or do a one time close. You in west chester? I’m down the road in Wilmington DE on Concord Pike if you ever want to chat more about them.

How many mortgages are too many??

Most Popular Reply