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45
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Lincoln Coverdale
  • Beachwood, OH
18
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45
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SFR homes to cheap to get financing, alternatives?

Lincoln Coverdale
  • Beachwood, OH
Posted

Hep BP peeps,

I posted a similar thread a few years ago and am back in a similar situation. Here in Northeast Ohio (specifically the near east side of Cleveland) SFR B/B+ rentals work great with the following model:

SFR: 3 bedroom 1.5-2 baths

Purchase and renovation: $60K to $75K all in 

Rent: $1200-$1350/ month 

Our Property taxes are very high so this nets us around $250-$350 per month after expenses and escrows.  

My problem is finding financing for more homes. We are at our limit for traditional loans (debt to income limited). I have looked at all kinds of lenders and I can't find anyone will loan on a $40K-$60K purchase price. I've looked at bundling homes, but timing is usually an issue not to mention the extra cash, we like buying and stabilizing one at a time. We don't have enough equity in our portfolio for a line of credit and already have one on our primary residence. I can sustain a 7-10% interest rate at a 30 year am. schedule with a 75% LTV and still meet our model.

What other options do I have to get financing so we can buy more homes in this range?

TIA

Lincoln

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