The Rules Have Changed

[Karen] Yesterday, Rosa and I attended a real estate investor meeting. Although many of my friends and fellow investors are at different levels, I thought that I would post some information that is not good news in any way but something that as real estate investors, we need to know.

The rules for how many mortgages an investor can have has changed drastically. Two years ago when I began investing, the rule was that a person could have 10 personal mortgages before there would be a challenge from the bank. Even then, this could be worked out one way or another.

Times have changed and not for the best.

Granted, the subprime market is a serious issue. There are way too many who have been put into homes simply because they had a pulse. Now, the time has come and the bills are not being paid.

As is always the case, the government now wants to close the barn door. The problem arises because there are also those responsible individuals who have chosen real estate investing to provide affordable housing and supplement their incomes.

The new rule is that individuals can not have more than 4 mortgages and this is a problem. If you are an investor with more than 4 mortgages, the bank will simply say that's all folks. From our side, the investor side, that simply is not good enough.

Next time I post, I will point out a few options for life after 4 but for now, just remember that 4 is the new magic number.