How To Buy More Than 4 Properties With Banks

In real estate, there are moments where
you come up against the wall,right in the wall where you bought a certain number
of homes and you can’t get past that. Today, we’re going to talk about how to
buy more than four investment properties with banks. Alright, my fellow Limitless TV
compadres. Compadres, is that the right word?
Anyway, I got a question here. Hey, Kris. Great video. I’m working my third home
but how do I continue to get funding after four properties if the bank starts
saying no? First of all, I’m not Kris, I’m Stephen. So get it right Pablo. Second of
all, I’m just kidding but let’s go ahead and answer your question here. You’re
looking at getting into more homes after your fourth home. The reality is, most
banks will.. I shouldn’t say most banks. Government regulations allow banks to
loan up to ten properties right now. That does fluctuate and change, sometimes it
goes back down to four, sometimes it goes back to ten so depending on
where you are, maybe it’s when you’re watching this maybe it’s ten, maybe it’s
four but how do I get past that mark where they say I can’t do anymore?
There’s a couple of things that I want to talk about here.. If banks say no,
there’s something that you want to look at, you want to look at your debt to
income ratio, alright. That’s one of the biggest factors and determining whether
or not they want to loan to you outside of you having the money and you having
great credit, they’re gonna be looking at your debt to income ratio. In other words,
based on the income that you have, how much debt are you carrying? How much
money are you borrowing and that’s in terms of student loans as well as car
loans, as well as home loans and all those different things, they took they
take a look at all of that kind of in one big conglomerate so what is your
debt to income ratio? And if it’s high, how can you lower that debt to income
ratio? There’s a couple different things that you can do. Number one is to earn
more money, number two is to get rid of some of the unneeded expenses that you
might have that can you know, pay off some of that debt maybe, that can free up
some space for you to be able to go out and do more so if you’ve got some car
loans, this could mean making some sacrifice,
maybe you sell off the nice car that you’ve got and get a smaller car or a
less expensive car for cash or for a little less monthly payment to free up
some of that debt to income ratio to allow you to go out and buy more real
estate. Another option that you can do if the banks are saying no to you right now
is you can partner with other people. By the way, this is something that you’re
going to have to do no matter what at some point if you want to grow your
portfolio beyond X amount of homes whether that’s four or
ten or whatever. At some point, you’re going to need to learn how to partner.
Now partner, you can come in a lot of different ways, you can partner with
somebody who has the money and you have the credit, right? You could put if you
don’t have the credit or you use as much as you can then you can part with
someone has the credit if you have the money, you could partner with somebody
that has the money and credit and you do all the work. Alright, so there’s a lot of
different ways that you can partner to get around this, the bank want to let me
type of scenario. So partnering is another solution. A third solution,
another thing that I’ve been thinking about here is going to new banks or new
lenders, right? Oftentimes, when we get stopped in our tracks, when
we’re ready to go and you know we’re at home number three or four, maybe we’re
trying to get number five but our big says hey, I’m not gonna loan to you
anymore. One bank is not all banks, right. Every
bank has different guidelines, different regulations, different underwriting rules
and that’s really important to understand because although one bank may
say no, there may be another bank that’s gonna say yes and you may go to ten
banks that say no or ten different lenders that say no and it’s that 11th
lender who says actually, I don’t like this individual, I like whether or not I
like what they’re doing and it’s working so I’ll loan to you, alright. So don’t
just stop with one, don’t even just stop with five or ten, continue on and even if
someone is saying hey, you’re not gonna get this loan, I would say do everything
that you can in your power to defy those odds and to get after it and to find the
bank or the lender that will loan to you so that’s another one. The fourth option
that I can see here and this is probably the last option as I’m just kind of
going through and thinking about this is to trade old investments for maybe new
investments. In other words, it may be worth taking look at the last three
homes that you have or the last four homes that you’ve done and that you’re
maybe you’re holding on to, do a proper evaluation on those homes. Are they
paying you enough, right? Are you earning 15% to 25% on your
money on each property individually because if you’re not, it could be worth
selling that property and getting a different property that will produce
better for you. One of the big benefits that people have seen in working with
Kris and I over the years is oftentimes the homes that they purchase with us in
our team will lower or will work to lower their debt-to-income ratio. How
does it do that? Well there are certain lenders and certain banks that will
allow you to take 75% of the subject property that you’re buying of
their projected rent and account that as income. So just a quick example here, if
you’re buying a home and the monthly payment on that home is let’s call it
$650 a month but the rent is $1,000 a month, the bank
will allow you to take 75% $750
of that to apply as income, right. Now if that’s income.. So if you incurred $750
or $650 of debt but because of this property you’re buying,
it’s actually giving you, they’re allowing you to count seven hundred and
fifty dollars of that as income, then you’ve just actually lowered your debt
to income ratio rather than increasing it with each new property. If you’re able
to lower your debt to income ratio with each property that you do, the banks are
more than willing and ready to loan out more and more and more real estate or
money to you so you can buy more and more real estate regardless of how many
it is, right, until till you get to your actual limit so hopefully, those
options have helped. If you haven’t kind of got into those options yet, Pablo, I
recommend get into those, do some of those different things,
check your debt to income ratio, try to adjust that, look into partnering,
talk to some new banks and then look at your old investments, your current
investments that you have and see if there’s things that you can do to
improve some of those numbers based on maybe they’re swapping out some old
investments for some new investments, maybe even going as far as to
doing a clean slate wipe, right? Just liquidating everything you have and
starting new into some new investments, that’s also sometimes an option that
makes a lot of sense. Hey, thanks everybody, thanks for being here, thanks
for watching. We so much appreciate it. If you’ve got any other questions, please
put them in the comments below. If you want to say hi,
put them in the comments below as well and with that, once you jump over and
watch another video or two.

27 thoughts on “How To Buy More Than 4 Properties With Banks

  1. I need your guys help I want to better my life for my wife and kids and real estate has interested through you guys. I have spent 2 hours a day watching videos to learn. To get started should I start a different business?

  2. This is a great reminder. Sometimes I forget about DTIR, which can be a deterrent if it's too high.

  3. Hi im 15 years old and i live in Trinidad its in the caribbean and i would like to go into real estate can u like check out houses in Trinidad and just give me some tips and ideas as a young person planning his future $1.00US dollar = $7.00 Trinidad dollars

  4. I own an LLC and the bank has said they will not issue a loan to an LLC. How can I get around this to maintain limited liability?

  5. Hi. I just moved to Utah a couple of months ago and been watching your videos for about two weeks. I would really want to work with you guys and start off investing in real estate. How can I do that?

  6. What’s up! Coming from Hawaii just wondering I’m 21 and want to get started. I’ve been watching just about all your guys videos wanted to know how I should start knowing Hawaii is really expensive just wanted some idea or help thanks!!

  7. If you are getting into your first rental, how long do you have to rent it out before the banks will consider the 75% rental income towards your actual income?

  8. The limit for financed houses is 10 properties. Does that mean that if you pay off the loan completely (or if you buy the property without a loan), that it won't count towards the limit (anymore)?

  9. all this only works if your rent is above cost of monthly mortgage. is this common in the USA? these guys talk as if it is so easy. never happens in south east asia unless you bought the house decades ago at a much lower cost

  10. If I had a lump sum of money possibly between 50K and 100K what type of property should I invest in for my first one. I live in Las Vegas

  11. consider that i buy a home and there are six months of vacancies. what should i do…. sell the house or wait for a tenant?

  12. I love your videos. I’m 27 and in the UK, applying your advice the best I can over here. I’m still only working towards my second home, planning on renting out my current home now I’ve got enough equity in it and moving to a second. Is single family homes the best way forward?

  13. Hi…kris its nice to watch your videos i have been watching your videos for 3 days continuesly and got some idea about investing but it doesnt work here in my place as loan interest rate is very high so if you the richest could invest here….

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