BiggerPockets

Hi guys,
Here is my question.
How does one build a rental portfolio of say 30+ properties without tieing up your own money in the process? This is my goal but I see that it may be extremely difficult to get in and out of a property at <70% LTV. The reason I use 70% because this is the current max of a refi set by Franny/Freddie.
If I don't do this I don't see how I could get out without leaving my money in the property. If I left mnoney in say 10 properties I would be out of cash completely.
Maybe I can find mortgage companies that refi at a higher rate but this will of course affect cash flow. I can also look for subject-to deals.
I hear a lot of people say landlords only need a property at 80% LTV minus repairs but I am assuming they are leaving money in the deal.
What do you experienced investors who have a large number of properties do? Do you just have a large amount of cash to tie up?
Thanks for being patients.

Anybody else have any ideas on this?

Maybe others know of banks that will do it, but I've yet to find a bank in this market that will do a cash-out refinance without seasoning of any more than 80% of the purchase price. The seasoning is generally at least 6 months.

This means that you'll have to wait at least 6 months to get all your cash out of any property, at which point the banks will generally consider 80% of the appraised value for the refi.

I have built a rental portfolio of 10 properties using hard money lenders to finance the initial purchase and rehab of the project. I then would refinance the rented property with a 70% conventional loan. As Mike mentioned, you need to be very selective of the property that you buy so that you will be able to get a 70% loan. I suggest looking at the fixed up comps in the neighborhood before buying.

The one hurdle that I have is adding the 11th - 30th properties to my portfolio. Even with the portfolio lenders that I've found, they won't finance any property over your 10th investment property.

Does anyone have any suggestions as to how we can add more rentals?

Thanks,
John

No, you won't have a problem. When you are operating a real business in a business entity, you will normally get commercial loans. There is no limit to the number of commercial loans you can have.

In addition, John doesn't really have a problem either. The 10 loan limit is normally on the number of loans, not the number of properties. So, he could simply refi his first ten properties into a blanket loan and then he'll have 9 more loans to go.

Mike

my problem is that I am trying to refinance my rental property to get cash out, but I am finding it impossible. I have more than 30% equity, and it is rented out with a small cash flow. but I have debt I need to pay off. I've had the property more than a year, in my LLC. but I have it in my own name/LLC, and don't want to use my husband's income-- he wants me to keep my rental separate. I don't have separate income to show. also, it is on a 2 year note with a small local bank in GA, and I'm worried about interest rates going up, and the necessity of getting a long term loan. should I just give up looking for something that doesn't exist?