As many investors know, you are only allowed to have 10 traditional financed mortgages with one of them being your primary residence, you can only have 9 more. As a full time investor myself I am always looking for creative ways to purchase investment properties. I currently have 8 total mortgages giving me 2 open spots. Recently a local wholesaler brought 2 properties to me for consideration. The numbers were so good on both of them that I was faced with 2 choices; 1. Fix and flip to end investor for $15,000 profit each or 2. keep them both. I didnt want to use up my last 2 mortgage spots on just any properties so what I am going to do is use a private loan against one of the properties but borrow enough money to cover the purchase of the other and own the cheaper one free and clear. I will refinance the first property on a 15yr note and get about $225 in cash flow an the paid off one will provide about $400 in cash flow. My total out of pocket expense will be in the $11,000-$15,000 range but for $625 per month with $15,000 invested providing me a 50% Return on Investment I cant pass on this deal.
As I get closer to using up all my mortgage spots I will have to look at other methods of purchasing property. This is a good problem to have as I am building a great portfolio and will tap into ways of financing or using leverage to my advantage.