How to finance more than one investment properties?

Question

My question is how do people have many investment properties say 7-10 $100,000 properties? When you try to get financing for more properties wouldnt you you be so far in debt? I know that you rent out the properties but you cant make that much profit after the mortgage payment. For example if you have 7, 100,000$ properties renting for 1500 a month with a mortgage of 1000 for each your only netting 3500 a month and in $700000 worth of debt so how can you keep getting loans for more properties?
47 minutes ago - 3 days left to answer.

Answer 1

first of all it is possible but it takes skill guts and a lot of hard work == say you own one house with a low house payment but a lot of equity == u borrow against it use it for a done payment on the next property and hope the rent will cover the payment plus maintenance fees of 15% of payment and 10% profit it this works you than gather up more down payment from savings and profit and keep buying -- works as long as you have good renters and the market does not bottom out!!!! but i am too lazy to go this route!!!

Answer 2

First off you are assuming that there is no down payment on the property purchase. If you are able to have a down payment and if the property has increased in value you have equity in each property that can be used to purchase yet another property.

Improvements to the property can be a significant factor. If you buy a property that is in need of repair but otherwise is in a good location your investment can be a viable one.

Where people got into trouble was purchasing properties with the sole expectation that the real estate values were going to increase by double digits year after year thus increasing their equity automatically. With the increased equity they were able to finance more properties expecting the process to repeat itself. The banks were loose with their lending requirements so they facilitated the process.

It is the classic bubble which eventually bursts because the property values get so out of hand the prices actually go down, not up. When that happens the equity on which the basis of the loans were made evaporates into thin air.

Answer 3

A lot of the "subprime" loans going into foreclosure now are exactly that - amateur "real estate tycoons" who now can't even begin to cover their payments or sell the properties for what they owe. One guy in Florida had $50,000/mo in mortgage payments.