BiggerPockets

Hi everyone

I've been doing some investments over the past couple of years, but I'm still definitely learning about RE and landlording.

In addition to my current residence, I've got 3 properties, which are all leveraged, so that's a total of 4 mortgages. But when preparing for the next purchase, my lender told me that they would not give me another mortgage because 4 is the limit.

The amount of actual leverage in investment properties is actually small (about 300k), which I told the bank, but they don't care. "4 is the limit", they said.

Is this just my lender or is it a hard rule across the board?

The lending officer told me about VA Vendi properties, but the selection seemed really poor, when I looked at them, and there were only a handful in California and they were in really odd places.

They also told me that if I moved into another primary residence, and started renting out my current house, then I'd be able to qualify for another mortgage. But, what if I don't want to move?

Is there a way to get around this? Maybe I have to start a business and put the loans under that?

Thanks everyone!

Hi Mitch, thanks for your insight.

I'm happy to hear that the limit of 4 is not for all lenders. I've seem many people with well over 4 properties, so I had a suspicion that the 4 wasn't the hard limit, but I wasn't sure.

The other alternative is to pay off one of the smaller ones, but then I don't get the benefits of the leverage.

Glad to hear that you have a good Vendee home working for you, I'll keep an eye out for things that come up in that program.

You will also more than likely run into having to show two years tax returns per property when you deal with the bigs as well. An alternative could be to find a portfolio lender that will do a blanket on your three rentals. It's not cheap, there are limitations, and it can be a pain in the ass, but it's an alternative nonetheless. That would leave you with two loans again.

Can anyone recommend a lender that will go past 4?

The irony is that it may be "easier" to talk to a commercial lender, depending on your history and financial situation. If it's 4 or 10, soon you'll need to "step up" and cut the cord of the cheap government money.

if you have a property that has very little owned on it, you can transfer to an LLC, and get a commercial loan on that property, which is NOT a mortgaged property in your name since its now in the name of the LLC,,,this helps if you owe very little or have a smaller property, but want to buy a more expensive one with one of your conforming properties.

6 months reserves for all rental properties (most banks say all mortgages but some will not make you have 6 on your primary), they will use 75% of lease amount if you don't have 2 years history on a particular property.,,,may pay 1/8-1/4 point more than on properties 1-4,,

hen Nathan, don't do it. It's clearly not right for you. It may not be right for anyone else either. But it works (and worked) for some of us.

The commercial loans in the LLC didn't show up on my credit report. Hmmmm. And they don't count towards 4/10 FNMA loans since they aren't.

My commercial closings take 60 seconds. My commercial "loans" take 60 seconds.

Explain to me the benefit of not planning ahead, unless you don't want to continue to leverage after the government giveaway.

No sense in using (or planning to use) private money, either, right Nathan? You have those FNMA bullets.

Last I checked (few months ago), Citibank was still lending 5-10, though only for SFRs and duplexes (no tri's or quad's).

Yes, the LTV drops to 70%, 6 mths PITI in cash reserves on all properties, NO 30-day lates on any of your mortgage in last 12 mths allowed, and 2 years of documented landlording experience in order to count rental income.

In my area, US Bank will go to six loans.

I have found that there seem to be local banks in most markets that have a wholesale lender available (the average small bank might have 4-6 different wholesale lenders that they resell their loans to, and some of these wholesalers are better at certain types of loans than othes) that will in fact go 5-10 on conventional, but you have to make alot of calls to find them.

Hi Al

Thanks for your replies. As suggested, I've found a local lender that I like and they have no problem with going past the 4 limit. I'm now working on my fifth property. Full steam ahead!