Investor · Los Angeles County, CA · Member since 2012 · 962 posts · 279 votes
Hi gang. So I was wondering where you seek loans if you already have 4 loans in your name?
Do you have to incorporate or put them in an LLC?
Is it just standard practice for conventional lenders to not give a loan if you have more than four loans? -this is even if we have around 4 owned with great equity and several fully paid for?
Would it make sense to refinance them into some sort of umbrella?
Investor · Cincinnati, OH · Member since 2010 · 1k+ posts · 928 votes
13y
If you're having trouble finding a conventional lender for loans 5-10 in your local area, I think that citimortgage.com makes them nationwide. Just call the toll free number on their site. If you can find a lender, it's certainly worth it to get the 10 at super low long-term rates, and only then move to local bank portfolio lenders. Some folks with two strong-earning spouses even get them individually in each spouse's name in order to get even more than 10. Also, it's counted as "financed properties", using blanket loans does not change the count for this purpose.
Investor · Willow Spring, NC · Member since 2009 · 5k+ posts · 3k+ votes
13y
The 4 loan thing (sometimes it's 10 sometimes it's 4) is a GSE thing. GSE is a government sponsored entity... us taxpayers support the GSE. GSE loans are basically low-interest loans for newbie investors. I guess the logic is that taxpayers should help finance the first few investments by novice investors. Anyway... if you have 10+ properties... can't get government-advantaged rate loans.
So, welcome to reality. There are other topics on BP about the financing wall... I don't have the bandwidth at the moment to provide links. search "10 limit site:www.biggerpockets.com" or "4 limit site:www.biggerpockets.com" for some ideas.
Investor · Baltimore, MD · Member since 2008 · 17k+ posts · 13k+ votes
13y
As Chris Martin points out, it is the GSEs in the secondary market that have that requirement. You can go to smaller local lenders that are "portfolio" lenders. In other words they don't sell the loans they keep them in their own portfolio. Since they are not selling eh loans they can make up their own rules.
Also go to the commercial side of the bank. You will have to get commercial loans if you use an LLC or other entity anyway. A "blanket" mortgage is one option. this is a large mortgage that covers several properties.
Good luck - Ned
Investor · Sunnyvale, CA · Member since 2013 · 62 posts · 19 votes
13y
My wife and I just purchased our 5th property and we worked with two lenders in Arizona. The first was Alliance Financial Resources, LLC. Unfortunately we ran into an appraisal issue and ended up using Prospect Mortgage (via Homepath) to get around the problem. Both of them were very helpful. The requirements are/were 20% down, 720+ credit score and six months reserves to cover the combined mortgages on all properties. We also had to provide lots of income documentation but it worked out pretty well.
Investor · Cincinnati, OH · Member since 2010 · 1k+ posts · 928 votes
13y
If you're having trouble finding a conventional lender for loans 5-10 in your local area, I think that citimortgage.com makes them nationwide. Just call the toll free number on their site. If you can find a lender, it's certainly worth it to get the 10 at super low long-term rates, and only then move to local bank portfolio lenders. Some folks with two strong-earning spouses even get them individually in each spouse's name in order to get even more than 10. Also, it's counted as "financed properties", using blanket loans does not change the count for this purpose.
SFR Investor · Los Angeles, CA · Member since 2012 · 48 posts · 7 votes
13y
Glen SonnenbergThanks for the info on the Arizona lenders Glenn. I also have homes in the Phoenix metro area and was in the process of looking for local lenders.
Will F. Yes the big banks won't offer financing if you have 4 loans under you name. You'll still be able to get 5-10 with other banks, like the more experience guys on here said. Good luck.
Real Estate Lender · Napa, CA · Member since 2012 · 27 posts · 4 votes
13y
4 properties is generally specific lenders overlay and not the rule, Fannie and Freddie do not limit number of properties you can finance, however most big lender max out at 10 properties. After ten properties the only game in town are portfolio lenders and local CU's.
Most large lenders will require you to disclose if you have properties in LLC, these will also show on your tax returns.
Investor · Wichita Falls, TX · Member since 2010 · 3k+ posts · 603 votes
13y
Actually Fannie Mae does have a set 10 financed properties rule in its official guidelines for conventional mortgages. However, the overlay most banks use is 4. There are different guidelines for properties 5-10, if you can find a lender who is willing to do the loan: