The 10 mortgage limit: is it 10 LOANS or 10 PROPERTIES?

[Jeff L.]

I can't seem to find a definitive answer to this.

Some people say that the limit is 10 properties (not loans), so even if all 10 properties were under 1 loan, you would be at the limit. Is this the case?

Also, does it make a difference if the properties are under an LLC?

My lender thinks that if I roll my first 10 properties (current separate loans) into a single blanket loan, under an LLC, that I can effectively start over at 0 properties. Is this true or false?

[David Dachtera]

@Jeff L.,

That sounds like a wise move: get your properties into a business entity structure and out of your personal name. The greater your net worth the more likely someone will try to take it from you through a frivolous lawsuit.

Once your business entity structure is established by that, use it to acquire properties in a business rather than buying them yourself.

To avoid being the target of a lawsuit the rule is: control everything, own nothing.

@Therese V.,

The "work-around" is to move your properties into a business entity structure and out of your personal name(s). Even if you hit some limit and the business can't buy anymore, start a new business and "fill that up", ... lather, rinse, repeat.

Financing is not primarily controlled by ownership. It goes by the debtor, not the owner (they're not always the same!).

That said, bounce the rest of your question off an attorney. If both your names are on the paperwork, you're likely to be considered a single entity and, therefore, subject to the lower limit.

David J Dachtera

"Success is not a destination. Failure is not an event. Success is a process, failure is a choice."
- DJ Benedict