Debt-To-Income Too High to Get Another Property, How Do I Keep Up the Momentum? | Rookie Podcast 52
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This week’s question comes from Meghan on the Real Estate Rookie Facebook Group. Meghan is asking: How do I keep up the momentum after closing on two deals, when my debt-to-income ratio is too high to get another loan? I’m too new to bring experience to the table, and without much cash or financing, what do I bring to the partnership?
We’ve heard this A LOT from rookies, and this is one of the main reasons that rookie investors get stuck and stop investing consistently. Ashley and Tony both have some great advice on keeping the ball rolling so your investment portfolio keeps growing!
Here are some suggestions:
You always have some amount of experience that is valuable to a partner
Find strengths in yourself that partners may lack
Share what you’re doing with other investors or in your social circles
Be confident on future deals: you’re bringing partners an opportunity
Look into other types of lending like commercial lending
If you want Ashley and Tony to answer a real estate question, you can post in the Real Estate Rookie Facebook Group! Or, call us at the Rookie Request Line (1-888-5-ROOKIE).
Check the full show notes here: www.biggerpockets.com/rookie52
@henryhawkins4914 3 жыл бұрын
This I feel is one of the issues with the BRRR method. Yes, leveraging is a great tool to build wealth, but there is such thing as over leveraged that isn't talked about very much. You could BRRR 10 properties if you wanted to, but still, only 1 property would be fully paid off. That's a lot of debt to carry if you aren't making that much money.
@qmakesithappen 2 жыл бұрын
Agreed, however no risk no reward if worst came to worst perhaps one can consolidate. Sell a few, pick back up and keep it moving. You'd be surprised how creative one can get when there back is against the wall.
@LashusJourney 3 жыл бұрын
I was told the same thing when I applied for my 5th loan.
@SterlingWhiteRealEstate 3 жыл бұрын
Another form of value you can bring to a partnership if you are new is your hustle. If you find a good deal people will be willing to partner with you. You may have to give up more on the deal to the partner, but you can use that experience moving forward and start to do more deals on your own
@CaseyBurnsInvesting 3 жыл бұрын
If your debt to income is too high lenders are trying to tell you something.
@JalapenoDNA 3 жыл бұрын
Over leveraged?
@MattHall83 3 жыл бұрын
Very good point! Pay down debt!
@BradHovis 3 жыл бұрын
They could be trying to tell you about THEIR current lending requirements...not whether you've got a deal or not. Lenders (banks) swing from one extreme to another very quickly...lending to everyone or no one...it all depends on their current position and how comfortable they are with current banking regulations.
@ryanmancini5681 3 жыл бұрын
Insurance question: Are there anything you like to have in your insurance policy for your rentals? Example like what the insurance agent doesn’t bring up like gap insurance. Pays off the loan of your car instead of paying just the Depreciation value. Thanks
@Vicpadilla79 Жыл бұрын
I’d recommend getting rid of BAD debt first, credit card, personal loans, etc. Then all youll have is the debt from your investment properties which of each of those properties is cash flowing your DRI won’t change too much. So long as you don’t start acquiring bad debt again.
@murali1790able 17 күн бұрын
What about vehicle loans
@bistro985 3 жыл бұрын
Great video! However, Most big banks won’t do a commercial loan on a single family rental , or duplex , or Quad. If you want a commercial loan, look to small town banks or local credit unions.
@BradHovis 3 жыл бұрын
@bistro985 that's not necessarily true. A commercial loans is just a lending product. I've received commercial loans on SFR. The issue is that the terms and interest rates are not very attractive compared to residential loans.
@Je.rone_ 3 жыл бұрын
Getting a property for me has proven difficult
@MellyP1 3 жыл бұрын
It’s a everyday hussle to find a deal, make sure you’re preapproved to throw a offer as soon as you find one
@BradHovis 3 жыл бұрын
Have you googled to find wholesalers in your city?
@SterlingWhiteRealEstate 3 жыл бұрын
it will be with this mindset. there's a way if you are committed enough
@charlesg7926 2 жыл бұрын
You need an actual successful business or high paying job, and thus- a good income. Without having a good income nobody will want to lend to you, that’s just the truth. Doesn’t have to be super high but at LEAST like $70,000 income a year. I make around $180,000 a year
@stanmoney8470 3 жыл бұрын
Kind of hard to find a partner outside of a spouse. Normally when people do business together they fall out for whatever reason.
@roadtomanitoba9753 3 жыл бұрын
Isn't short term (up to 18 month) private money bridge loan is the way to go? Bank will reject you until property is seasoned, private money won't give a damn if deal works. Whatever you overpay in interest on this loan and fees on later refinancing should be included in closing costs.
@jesusmejia4138 3 жыл бұрын
Hey guys! What banks do you recommend for financing rentals property? Also I have a rental financed on a commercial loan at a 5.25% and actually live in it. I want to cash out on the equity with my current lender and try refinance it on a FHA loan. Can I do that?
@johnnyb33good21 3 жыл бұрын
Is the property you're living in a 1-4 unit? If so you can do a FHA cash out refinance but it's only going to be 80% LTV and not 96.5% like on a purchase using FHA. But you could also do a conventional refinance Freddie or Fannie And depending on how many units the property is your loan-to-value is going to vary and you should look up a mortgage broker that can shop multiple lenders to find you the best rate and fees and also give you more accurate info. I'm not a mortgage professional. I'm An investor that has 18 units and has done several purchases and Cash out refinances
@BradHovis 3 жыл бұрын
Ridge Lending works with investors across the country. They have no seasoning refinance too...in case you need to pull out cash quickly. I get no kick back from them, but check em out.
@BradHovis 3 жыл бұрын
They're out of Oregon.
@gabrielleon1121 3 жыл бұрын
Need help! Looking to get into real estate investing. Just confused as to how do you actually pay yourself from the cash flow a property makes. Aren't you supposed to save all that cash flow money for future maintenance on the property? Please assist
@stanmoney8470 3 жыл бұрын
You should save at least half of your rent money for repairs.
@charlesg7926 2 жыл бұрын
What I recommend doing is putting all of your “rental income” money into a separate bank account- A “rental savings/checking account”. This account will be used to pay anything on the home- mortgage, repairs, etc. I recommend not taking any money out of it until you’ve got at least $15,000 saved up- and then only take out any extra money over $15,000. This way, if your electrical panel AND your HVAC break at the same time, you’ve still got money to do them both with the $15k. It’s a pretty safe way of doing it Once you’ve got that 15 K, any extra money can be used to support your lifestyle or better yet, save it up to invest in more rental properties
@charlesg7926 2 жыл бұрын
At minute 4:15, 15 I feel like it’s a bigger issue than just “not realizing what they have“. I feel like she must have a fundamental lack of respect for the skill and intelligence of a home improvement contractor. Because otherwise, why else would she not use that connection? She must think that contractors are dumb and useless and that white-collar investors somehow know more… Which is obviously not true. What else is there to say about her mindset?
@jeffdorris5321 3 жыл бұрын
Nice work 🎆✨🌠