Investor · West Monroe, LA · Member since 2016 · 7 posts · 1 vote
I am looking to buy four rent and hold properties from an investor who is selling them all together. Should I get one combined loan ,or four individual loans? I want the pros and cons of both. I have plans to purchase other properties in the future and want to know which loan is better for this.
Investor · PA · Member since 2013 · 1k+ posts · 602 votes
10y
They are all being financed by the seller? I would suggest having a separate contract and separate note for each so they can be paid off individually or refinanced individually without as much headache. Likewise with a commercial loan unless the savings in fees would be substantial and terms are good.
Specialist · San Francisco, CA · Member since 2016 · 58 posts · 30 votes
10y
Sheldon Jones I believe once you get over four loans and under ten the number of lenders available becomes lower. Anything over ten you have to go to other options like portfolio loans.
Investor · West Monroe, LA · Member since 2016 · 7 posts · 1 vote
10y
@Julie L. that's one of my concerns i want to maximize the amount of loans available before i have to look into other forms of financing for future purchases
Miami Lakes, FL · Member since 2015 · 133 posts · 83 votes
10y
I'd start talking to local small banks and credit unions. Try to get a portfolio loan to cover all four at once. Save a bundle on closing costs, for certain.
I believe I was just reading a different thread last week about B2R Finance offering a loan for situations like this. Maybe check them out?
Real Estate Investor/ Lender · Newport Beach, CA · Member since 2014 · 36 posts · 10 votes
10y
Hi @Sheldon Jones, the loan type will depend upon your future exit strategy. Planning to hold the portfolio for 5 or more years, a single portfolio loan can work to your advantage. The term is usually 5/10 years with a 30yr am schedule. The portfolio is underwritten based on cash flow and minimum DSCR requirements. This option also allows the flexibility of financing in LLC with non-recourse option. Congrats and I hope all works out with acquiring the portfolio of rentals. Happy to help with financing options and questions, Inbox me.