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If I am able to produce a 20% down payment on a ~$ 150k-200k property every year or two, will I be able to keep purchasing homes and renting them out as investment properties? Are there limits of any kind on the amount of loans banks will provide, assuming the profits are invested back into the business and mortgage payments are always paid on time? Or are there other investments that would have better payoffs.

5 Thoughts on Is it possible to buy a real estate rental property every year or two?
  1. Reply
    March 5, 2013 at 9:45 am

    you certainly can… and there are ways to buy property with evn less down, although you would not be using the bank… you can even buy property on a land contract and not even involve the bank in the purchase at all.

  2. Reply
    March 5, 2013 at 10:39 am

    As long as a bank will approve you, you can buy as many rental properties as you want. Whether it’s a good investment or not depends a lot on where you live. If you are in a place where rentals are few and people are always looking for a place to rent then it should be a good investment. I would recommend you start with one or two and see how you like being a landlord and see if you are making a profit before you buy a whole bunch of places. It would be bad to get stuck with a bunch of loan payments and not be able to rent the properties. You will find there are a lot of people out there who will move in and then not pay you and you have to go to court to evict them and you end up losing a couple months rent.

  3. Reply
    March 5, 2013 at 10:47 am

    “Or are there other investments that would have better payoffs.”

    Rental real estate is one way to invest money and make a profit. But it is not the only way.

    The old saying of never put all of your eggs in one basket applies to investing.

    One of the troubles with real estate is compared other investments it is less liquid. If you have a cash crunch then selling a home takes far more time vs. selling stocks or withdrawing cash from a savings account.

    A properly diversified investment portfolio is always wise. Rental real estate can be a part of that portfolio. By no means should it be the only part.

  4. Reply
    March 5, 2013 at 11:24 am

    Presently the banks are all huffy about you wanting a 5th mortgage.

    But, that will likely not be the case anymore once you are at that point.

    The previous huffy mark was 10 mortgages with the same bank. Now, it is 4, no matter what bank.

    I have exceptional credit, lots of property and presently have to pay cash. I am not happy. But, I just can’t get a loan and have not for months now (not that I try every month).

  5. Reply
    March 5, 2013 at 11:55 am

    It is possible to do this yearly. Most real estate investors do not invest 20% down on any property they purchase. Purchasing property this way normally do not produce a break even or cash flow property.

    Then there is the long loan processing process that most real estate investors can’t wait for or will not be approved for based on the ratios that will be calculated by the mortgage companies.

    In order to become a real estate investor, I suggest you go to your local book store, find several books on buying real estate as an investment. There will be legal techniques that most real estate investors use to secure properties without putting 20% down on any property.

    #1 You might take the property subject to the existing mortgage loan.

    #2 Take the property on a lease to own situation.

    These are just a few of the techniques that real estate investors use and both require less than 20% down.

    There are many other investments that you might look into prior to making a decision as to which you would like to use. Normally investors utilize several investments instead of putting all their eggs sin one basket.

    All investments have risk so, make sure you understand the risk of each investment you decide to use.

    When investing in anything education and information is the most important part of the investment process. “Remember that a fool and his money is soon departed.” So before embarking on any investment make sure you read read and understand, ask many questions ask many questions.

    I hope this has been of some benefit to you,good luck.

    “FIGHT ON”

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