Use an Out-of-State Lender for Out-of-State Properties?

4 Replies

I own a couple rentals in the same out-of-state city and am potentially interested in purchasing more in the same out-of-state city.  I would like to establish a long term business relationship with a lender for one of the current properties and all future properties.  I am wondering whether it makes more sense to seek a relationship with a lender near where I live or in the out-of-state city.  At this point I am leaning towards seeking a relationship with a nationwide bank near where I live (either the one I use for my general banking or the one that holds the mortgage on one of my rental properties (the second property is financed with private money that I would like to eventually refinance out with a conventional loan to extend the payment period)) based on being able to meet in person to discuss deals, but I could be persuaded otherwise.  At this point I only have two rentals, so I don't need a portfolio lender yet.  Any advice is welcome but I would particularly appreciate advice from someone with experience with this.  Thank you.

Local to you will make building the relationship easier. However, I would suggest staying away from the big banks. Once you hit theit threshold for number of loans, you'll start to have problems getting more properties financed. You would be much better off with a local portfolio lender. Portfolio meaning they keep the loams in theit own portfolios and service them without packaging and selling them. 

@Luke Montoya  What you want is to establish a relation ship with a national mortgage banker who has access to many options. That way you are not building a new relationship every time you might enter a new city, and as your requirements change.

Good luck.
Upen Patel
@Carlos Reyes It would make sense to have a local lender, if you are in a unique situation, e.g. No one will write a lone because the property is condemned, but a local banker would know the area and look at your plan from a future perspective.

In most normal situations, and even some unique ones, you are better off building a relationship with someone who you can work with across the country.

I see that you are local to me. Would be happy to meet or talk over the phone.

Upen Patel