How to buy rental property with no money

Question

I own 3 properties, due to this I no longer have enough money to put down another down payment on any piece of property. I would like to buy a property with 4 units or more. How could I get a loan for something like this when I have no money to put down? Also, My debt to income ratio is high, how do the rich get richer and keep buying more and more properties whenever lenders look at your debt to income ratio.. They won't let me buy another property because my debt to income ratio is too high and also because I don't have a job because I'm in school full-time. How do I manage to get around this roadblock?

Michael Glist · Answer

So for the DIT issue you can look into DSCR loans as they are based on the property and its ability to generate enough rental income to cover the mortgage, taxes, insurance, etc., as opposed to your personal income and your ability to afford it.

For the money issue you can look at getting a private investor to partner with to provide said funds. The thing with that you will want to be careful of though is making sure your lender is ok with the funds not being your own and being borrowed. That is where you will likely find bring in a money partner the hardest if purchasing as a turn key rental.

If you are looking to use the BRRRR method, then you will still want to make sure that the lender is ok with the funds from someone else but you will also have the exit strategy of refinancing and paying the lender of as well as partner off that funded the down payment.

So I think it will come down to the lenders that will allow secondary financing as well as what your strategy is.

JD Martin · Answer

Well, first thing I would say is the fact that you have 3 properties already while you're still in school means you are probably well on your way, assuming they're all good cash-flowing properties and you have good equity. You probably need to follow Axel Rose's advice and have a little patience while you let some of this grow, assuming you're not eating off the profits from the rentals. If you aren't touching that money, you should be snowballing it into another down payment.

How to buy rental property with no money

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