Scaling Past 10 Doors... Was It Creative Financing or Banks?

Question

For those who’ve grown portfolios into double digits — how much of that growth came from creative lending structures vs. traditional bank loans?

Isadore Swartz · Answer

DTI has always been a problem. My last two additions were desperate sellers with the ability to carry back 50%.  Does not show up on credit reports either. Looking for my next.....

Also don't have to provide a mountain of data to a bank to get a loan.

Wesley W. · Answer

I used conventional lending until DTI for both my wife and I individually started to max out.  We've since left our W2s, so our last "new" multi we bought (2023) in cash with private money.  My most recent transaction, a month ago, was a 1031 exchange.

Kerry Baird · Answer

I ask for creative financing on every offer, and that is super helpful.  On the traditional bank loan side, DTI and reserves became onerous, particularly after the 4th conventional mortgage.  My DTI would often be impacted by renovation expenses on my personal credit cards.  There are smaller deposits up front, which enable buyers to keep more of their cash but we are limited by reserves for all of our houses & DTI.  Going to DCSR mortgages have higher down payments, which I did not appreciate at first, but since they fund off of cash flow, we could keep going.