Sarasota, FL · Member since 2017 · 31 posts · 3 votes
Hi everyone, does anyone know where I can find a list of portfolio lenders? Is there an easy way to tell by looking at the bank? I reached out to a couple, but they sale their loans. Correct me if I'm wrong, but I believe I heard a portfolio lender is one that keeps their loan versus selling, can have a shorter or no seasoning period, and you can typically have more than 6 or 10 loans with them. <= going by memory here.
If you go with an LLC, that's a game changer. You won't be considered for a residential loan and the financing will become commercial; higher interest rate and not as favorable terms.
Portfolio can mean many different things.
@Upen Patel is right when he wrote "Portfolio is a general term to cover a big group of lenders that do loans that fall outside the agency guidelines." @Alan G. is also right when he describes the local banks that hold their loans and another definition that some call a "blanket" or "portfolio" where there's more than one loan covered in the loan. Like I said, there are many definitions for the same word.
Until you get a bunch of properties and you need to worry about the tax implications of co-mingling funds, keep the properties in your personal name. If you're worried about liability, get an umbrella liability policy. Much cheaper and easier.
Hi! @Charles Mullins Portfolio lender doesn't mean that they will hold onto it. Portfolio is a general term to cover a big group of lenders that do loans that fall outside the agency guidelines. Hope this helps.
You might want to post a specific question as to what you are looking for so that BP members can help you get there.
Hi @Upen Patel. I'm learning so please bare with me. What I'm looking for is getting something establishing a relationship with a bank that can immediately refinance a rehab project without a long wait time. My understanding is this is called seasoning and some banks have 6 month to 1 year criteria in place you need to wait. I also want, ideally, the same bank to not have a limit on the number of properties. I thought I heard if a bank sales your loan to Fanny Mae, etc. you can only have so many of them. So, I want to avoid that and start with a bank where they do not have this limitation.
Right now I'm just working on getting the financing piece setup, so I know what path I can go down when I find the good deals.
The 6 month to a year seasoning is pretty typical, but 90 days does exist. Which, when you think about it, is really fast if you have a 45 day rehab and maybe it takes a week or 2 to get a tenant into that property.
You will know if you have a fannie/fred loan when you get it, the bank won't just change that based on whom they sell the note to. You are right that there is a limit of 10 fannie/fred loan per individual. Get married and you each can individually have 10 (if you individually qualify).
The rehab/acquisition loan will not be of the Fannie/Fred variety. You could expect terms to look something like 90% LTV purchase and 100% of repair at maybe 12%ish interest-only for 12 months and maybe 3 points or so and can close in 15 business days. That should at least give you something to plug into whatever calculator you are using.
That isn't quite a large line of credit for rapid acquisitions, but on the conventional side, LOCs are usually in the $1mm+ range.
Charles,
We do portfolio loans all the time and yes, I have over 10. It's a correct statement that most of the time they will hold onto your loan and not sell them. Generally you are going to find smaller banks and credit unions will do them. A local credit union has done everyone of my loans and I'm well into 7 figures. You will wind up speaking to the commercial loan department so whether it's through your LLC like I do or wether it's in your personal name it won't matter
Charles,
Drive down the road close go where your investments will be and stop into every small bank and credit union and just have an honest conversation with them. I'm not kidding when I tell you I did it over 15 times before I came up with my lender. We now have a great relationship including me taking him to dinner every once in a while. Hey have specific guidelines that we meet but good terms, competitive rates, and NO seasoning.
Hope this helps
Charles,
Sorry kept hitting enter today. Upen is right in his definition. When i refer to a portfolio loan, i generally mean a package of properties under 1 loan.
@Alan G. thank you and I did hear local / smaller banks and credit unions were the ones to visit. We are thinking about an LLC, but didn't know how that played into loans. Good insight there and still learning the LLC pros and cons. <= still a lot to learn there :). Thanks again
If you go with an LLC, that's a game changer. You won't be considered for a residential loan and the financing will become commercial; higher interest rate and not as favorable terms.
Portfolio can mean many different things.
@Upen Patel is right when he wrote "Portfolio is a general term to cover a big group of lenders that do loans that fall outside the agency guidelines." @Alan G. is also right when he describes the local banks that hold their loans and another definition that some call a "blanket" or "portfolio" where there's more than one loan covered in the loan. Like I said, there are many definitions for the same word.
Until you get a bunch of properties and you need to worry about the tax implications of co-mingling funds, keep the properties in your personal name. If you're worried about liability, get an umbrella liability policy. Much cheaper and easier.