How Can I Buy 10 Rental Properties Without Over Leveraging?

Imagine having 10+ different sources of positive monthly cash flow. That’s 10 unique sources of income every month. This is a common goal for investors. There is security when you have multiple sources of income. That way if you lose one, you have others to back you up.


Whether you’re new to real estate investing and looking down to road, or if you already own several investment properties and are looking to grow your portfolio, you may be asking how to keep attaining new properties without over leveraging.


Banks will only lend you so much before you are too high of a risk. Even if you could get 10 mortgages, you don’t want to over leverage, meaning you don’t want to accumulate more debt than you can handle. There are strategies that address this though, allowing you to invest without racking up more debt than you can manage.

The main way to do this is using other people's money (ie. Joint Venture Agreements). Almost all investors need to start looking at joint ventures once they reach their lending limits. If you’ve successfully managed properties, or sold Rent to Own homes, you have valuable skills that someone with money but no experience may want to partner with. When you can team up to share assets, everyone can be a winner.


Main Benefits of a Joint Venture Agreement:

  • Each person gains value/access to the others skills and/or resources.  

  • Allows you to purchase/invest in more properties.

  • Lower risks involved going with a group

  • Creates a win/win scenario for both (all) JV partners


Main Reasons Joint Ventures Fail:

  • Not building the professional team around you.

  • Entering a joint venture agreement with people who bring the same experience/resources as you.  You should be leveraging people with complimentary skills/resources.

  • Not doing your due diligence on the agreement and partners. Do your homework and make sure you are entering an agreement with people you can rely on. Also make sure the agreement is in everyone’s best interest. You can read more about creating fair joint venture agreements here.


Other notes:

  • Make sure you build a team of experts around you to help your JV ie.

    Real Estate agentsLawyers
    Property Managers
    Mortgage Brokers
  • Have the confidence to make use of your expertise in forming or joining joint ventures. Know your strengths and your weaknesses. Partner with people who are strong where you are weak, and deliver on your strengths to best support your partners.

  • Ensure the joint venture deals are win/win for all parties



The other main factor in attaining multiple properties is by leveraging your current properties.

Invest in a Buy and Hold property for the long term.  As it appreciates you can refinance, giving you access to the equity built up in your home. This occurs when the mortgage is paid down, and when the house appreciates. This is essentially free money accumulating as your tenant covers the mortgage and builds the equity in the home for you.


Main Benefits:

  • Access to Bank's Money at lower interest rates

  • Making maximum use of your current investment portfolio

  • Gain benefits from Real Estate Appreciation (via market increases and/or improvements done to the property)

  • Tax Benefits (convert Non Tax Deductible Debt over to Tax Deductible Debt)

Main Risks:

  • Property values go down

  • Interest rates go up

  • Moving into a Riskier Debt Ratio by Refinancing


Other notes:

It allows your investment property (and even your home) to "work for you" by giving you funds, which can be used to purchase more investments. 


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