How Can You Build a Big Portfolio Without Damaging Your Credit?
Hey guys, hopefully this question makes sense. I'm just a small time investor, but my portfolio is to the point where I will be expanding through 1031 exchanges into new properties. Within the next year or two I will need to purchase multiple properties within the same year (5 or more). How does this affect my credit? I've heard of big time investors that are purchasing hundreds of properties a year and they "borrow" or "rent" other people's credit. Although I don't know if that's accurate or how it works. Every time I get a new loan on a new property they pull my credit which obviously damages the score. I've also heard that there is a limit to the amount of loans a bank will give you within a certain time period. I am buying all of my properties with their own LLC and not holding them in my personal name, but the bank still wants a personal guarantee. Will there be a banking issue when my portfolio gets to the point where I'm needing to purchase say 20 properties or more a year?
Lastly, my salary is about $140K/year. Does income to debt ratio factor in or not? I assume as long as the property cashflows well and my debt coverage ratio is good (I usually shoot for 1.6 or more), then it won't matter, but I'm not sure. Thanks for the help!