Maxed out on mortgages, now what??

[David Boroughes]

Hi all, I own several investment properties and am always looking for more, problem is, I am now maxed out on conventional mortgages. Where do I go from here? I would like to add more properties to the portfolio and have never had any issues or late payments on any mortgages, the issue is my debt to income ratio simply will not allow for any more loans. Having the property qualify on its own does not work, simply not enough net to qualify for much of a loan. The prices here are on the higher side (SF @ $250K, MF begin at $285K) although the income they bring in makes decent ($8,000-$14,000/yr) cash flow possible with about 25% down payment. Can anyone in similar situation previously help?

[Ashley St. Gelais]

@David Boroughes

Hey David,

Al has the right idea. Before you form an LLC go to a local bank or credit union and ask to speak with their commercial department. They typically have a different and easier formula they use to ensure 1st the property will cover it's own expenses and 2nd that you can cover your own living expenses.

As long as you get approved, your attorney can help you form an LLC (to ensure it is done correctly to ensure you actually get the additional protection it allows) right before closing. Typically, it makes sense to open a separate LLC for each property. That way if someone falls and sues you at property A and sues llc a, then they shouldn't also be able to get to the other assets you have in other LLC's.

Hopefully this is exactly the info you need to keep on keeping on!  : )

Ashley