How To Buy Multiple Investment Properties
Articles,  Blog

How To Buy Multiple Investment Properties


Kris Krohn with REI TV, today were gonna talk about again one of my favorite topics which is How do you buy multiple investment properties? And you can see that be in favor right? Because if you can do it once, and that benefits you why not ten times. And if you like ten why not a hundred, and I like a hundred so I like a five hundred. Listen, if buying one property taste good
and produces good cash flow increases your net worth and works towards a greater retirement, then, why not two times or why not five times or why not ten times. But if you do that you gonna make sure that you got the secrets to qualify to as many properties you get. So
I wanna go through three different strategies. • The first strategy is doing careful management of your DTI or Debt To Income ratio. This is really important because when you think about your debt to income ratio normally if you buy something on credit it’s going to
add to your DTI and the banks gonna say “o oh Kris you now qualify for less”. So they
like to see assets they don’t like to see debts. Well when you buy your first investment property here’s one of my secrets: o If I buy it using my very strict formula
were I maximize cash flow, here’s how I maximize my debt to income ratio. If I have, let’s say a house that has a mortgage of $600 a month. And it rents for a thousand, I can show that rental contract to the bank and they’re gonna count 70% in general of
the rental income. So, for example 70% of a thousand is seven hundred. What’s my mortgage payment? $600. So, there’s a delta or difference of a hundred. So, the banks says “Oh my
gosh Kris actually after buying that house. Guess what? You’re actually a hundred dollars
more well off, we not only cancel the negative debt to income ratio. But you actually qualify for even more houses. Well guess what, you buy a house with a lousy cash flow, this strategy does not work. And you won’t be buying very many houses. And if you’re not buying successful in first place, it’s not really gonna matter. • Strategy number two. When it comes to
qualifying for as many of this properties as you can, is having partners. This is an
excellent strategy when it comes to, uhm…, whether or not you can actually qualify for
a home. If you cannot qualify for a home, then a partners way to go. Because, guess what, they got the job, they got the income that they qualify. So, there are really great
way. Ahh.., with really limitless boundary, to continue buying real estate, in fact, once I had purchase my first four homes, I got to point where I didn’t have the money,
I have the credit but not the money to buy my next house. I brought a partner in, have to be my father in law made the guys great money on a deal. He kept coming back, I started bringing more partners, well, doesn’t matter what the banks says to me, it doesn’t matter if they tell me “Kris you can’t qualify. You’re not good enough on paper. Listen,
nothings gonna keep me from buying real estate especially if I’m doing it with a system
and a strategy and it’s working. So, that’s a good one.
• The third and final strategy I wanna share with you today is making sure buy right. What do I mean by that? We’re I already talked about buying with cash flow. But let’s talk
about equity. Why is that important? If I buy something below market, let’s say I
buy three houses below market. Well guess what, I wait a couple of years, I let those
properties season, I get a good cash flow of them. If I bought them correctly, I can
consolidate those three homes and buy six. Why? Because if I buy each one well let’s
say $40,000 equity possession. If I were to sell those three, I get all my down payment back plus my one hundred twenty thousand dollar gain, I can do little bonus here, 10-31 tax
exchange, that’s an IRS code that basically means that I can differed the taxes. And I
can roll that money into a bunch more homes. So, if you buy right with the right equity
in addition to cash flow, that’s also in time gonna help you qualify for more more real estate. GO! Buy real estate. In fact go buy as many as many as you can. Use this system, use this strategies. Be fruitful, multiply that portfolio. Thanks so much for watching . Don’t forget to subscribe. We’ll see you next week.

46 Comments

  • txoovlee

    Hello Kris, is there a way I can contact you directly? I want to know if you are aware of anyone in my area that may be a good/positive/honest mentor. Hope to hear back from you. Thanking you in advance for your time.

  • joe 90

    I have over 20 Excellent Properties in North ( Black ) St Louis…mot of it self funded .I have great cash flow BUT

    the local banks and Credit Unions will NOT lend in Black Areas due to Racism and discrimination..Sucks

  • Llovani Rojas

    I've been learning real estate for quite some time. Youre channel is the best. I am currently 20 years old and buying my first Property. A townhome (2 story) 2bd 2 full bath ( 1 in each bedroom) and I already have someone who will be renting 1 room and I live in the other. Great videos! I will be taking you strategy and putting them to use. Thanks! keep it up.

  • Marie Martin

    Thank you for taking the time out to respond to my comment, that speaks volumes of your character. I re-watch and re-watch your videos. You have no idea the motivation you give me everyday to keep going to understand Real Estate so I can open my business one day. I love your approach to teaching, you are direct, friendly, and clear about what you are saying. And that's a lot coming from me, since I am extremely picky about who I listen to you. I recently finished my 40 hours of real estate training. Thank you for being a blessing and finding your calling. You have found a loyal student in me.

  • Jared Coning

    I'm really struggling to understand all of this… If you buy three house don't you still have to pay the mortgage? Or are you saying to rent all of them out. Please help lol

  • Harry Y

    Chris, when partnering with someone who wants to go in 50/50 on the downpayment, do i also give them 50% of all net profits? .. or in general do you ask for a bigger share if you found the place and do the initial legwork? great channel btw, thanks!

  • Phillip Skene

    Hey Chris –

    I have 10 FNMA-backed loans. I would like to continue buying investment properties but can't get any more FNMA financing per their guidelines.

    What have you done?

    I've talked to commercial lenders, but their loan terms are unreasonable (and by that I mean the rentals I buy will no longer cash flow).

    Any tips?

    Thanks,

    Phil

  • Joshua Fluman

    Chris, I spoke with you briefly on a different video. How you suggest getting started with investment properties when someone is stuck in alot of consumer debt? I'm beginning to work as a Birddog on the side for someone trustworthy I know, but not sure how to make the move from that to actually investing. Btw, I'm also currently taking the state course for RE.

  • Madelyn Webb

    Easy to say, If you buy so many properties in one stop…There are a closing cost on each one….point on each loan… How do you handle with this kind of agenda. At least, it has to be close to each other in order to make a conglomerate…tear down and build a bigger residential property with units/condos…. Please, respond on my question. Thanks

  • Victory Heil

    Hi Kris, I know you mentioned in your videos how you tend to stick with short term 5-7 year deals but could holding on to a house longer than that still be beneficial?

  • Adrian Barnes

    FYI: The banks will not count your debt-to-income lower simply by showing proof of a lease on a rental property. They need to see your W-2s to see if you took any loses. That will definitely bring your buying potential to a screeching halt.. Been there, done that.

  • linop412

    Hello everyone, first, thank you ahead of time for reading this. I am a new REI and have decided to start my new career in long term holding rental properties instead of flipping, in pursuit of the financial freedom aspect of it. I have one very important question that has been on my mind and would like to get cleared up before I jump in with both feet. I have decided to sell my current company and go full time into REI, but in order to do so, I would need to at least make a minimum of 50k-100k a year.
    ​
    ​My main question is this… say for example I am looking to invest in du or triplexes and I found one that I would like to start with that is around 100k and will need 20% down(20k). After running analysis I find out that the cash on cash flow will be around $300 a month. This means that essentially I would need to have 14 properties in order to make enough cash flow to support my lifestyle and pay my bills. I understand that, but what I am having trouble with is the amount of cash needed for the down payment each time you purchase a new property. If I did need 14 then it would mean I would need around 280k in cash. Going with this formula it seems that it would take years before the properties where generating enough cash flow to save and buy another. That is why I am starting to wonder if after the first property am I able to use the equity as the down payment? Also, is it better to just buy larger properties with higher rent instead of multiple properties with lower rent? Before I jump in with both feet I really would like to get a strong understanding of this. Any advice is greatly appreciated.
    ​
    ​P.S. I am also in the process of joining a local REIC, but I wanted to try and get the answer before then if I could. Thanks again.

  • akadimas

    i'm 20 years old and i'm trying to figure it out the best way to allocate my money, i'm thinking about to purchase a down payment for an apartment and pay the rest of the mortgage by renting it to other people, or i'm just gonna put it in stocks, peer to peer lending and deposit, what you guys think work best ? i don't wanna be broke once i graduated from university

  • Juan Mercado

    Do you have anyone that can help me out in Arkansas, currently trying to find my first rental property, I have about 11k saved up but needing someone to guide me

  • PI Finance

    Watch Daniel talking about his buying first investment property πŸ™‚
    https://www.facebook.com/pifinance/posts/1231983380227010

  • CaSualCasUL

    Informative video Chris, But how can I educate my self more on tax benefits as a real estate investor? should I read a book or take a course ?

  • El Mago

    Hey Chris, if you partner up with someone as you did with your father-in-law. What does the terms of a partnership look like?? How are earnings or losses split? I'm very interested to learn more. Thanks.

  • priscilla prange

    So if I have 3k to start with I can use that as down payment and go to the bank, they take care of a loan , my mortgage would be about 675 on a 3br. I rent two of those bedrooms out and use the third for me, making about 600.00 off each room month. Is that good?

  • Tee Bee

    Aren't there different lenders that can just start you off with accounts to hold more than 4 properties? I keep hearing about people getting to a 4th property and lenders would say that's the most they have. And then they're recommend to bigger lenders for people holding 5 properties or more.

    I'm trying to do my research.

  • Jessica Garcia12

    Thank you for the info! If I want to buy a second investment property, do I only need to show the contract with my tenant to the bank or do I also have to show proof of this rental income with my taxes?

Leave a Reply

Your email address will not be published. Required fields are marked *