How can I get homeloans for 16 properties at the same time?

Question

Hey all, can some experienced investors tell me how I can get multiple home loans from the bank for buying multiple properties. If I refinance my house, I will get $400K cashout which I intend to reinvest.

I want to put as many down payments (for as many houses) as possible. How can I get the bank to give me as many homeloans as possible? What is required? What are some strategies that you would suggest?

Thank you :)

Marcin Talaga · Answer

Shay,

Sounds like an extremely bold thing to do.  Good for you!!  I can't help but wonder, if you are going to have $400k on hand, wouldn't it make more sense or be safer to use it as a downpayment on say a 16 unit building?  Or put $200k down on 2 - 6 flats?  Maybe I'm thinking a bit too safe but that's the route I would consider.

Marcin

Shiloh Lundahl · Answer

@Shay Singh I agree with @Brie Schmidt I would encourage you to go the way of conventional loans first and then go commercial loans.  There are portfolio loans which can be an option where you can get one large loan to cover several properties.  Usually the commercial loans are 20 years and adjust after 5 years so the cash flow is usually lower than a 30-year conventional loan. Sometimes that can make the difference between a positive cash flowing property and a negative cash flowing property.

Brie Schmidt · Answer

@Diana Dorantes - Good memory!  @Shay Singh - I bought 18 properties in 9 months and used a commercial lender (US Bank)

It was not a portfolio loan, they are individual standard commercial loans but I did 3-5 at the same time.  So like once a quarter I would start looking for properties, find 1-2 anchor properties and put them under contract with a 60 day closing.  Then I would spend the next 30 days seeing if anything else would fit my criteria.

Commercial loans are typically not for new investors, so you may need a few properties and a few years under your belt before the banks will work with you.

On the residential side, you can have up to 10 loans per spouse (assuming each of you can qualify) and the terms will be much more favorable, but you are approved based on your finances, so if they are strong your experience will not matter

Kurt K. · Answer

Sounds bold. If you are a new investor to REI, you might think about house hacking your first property. Sell your house and move into a duplex and rent out half. This would get your feet wet and you could decide if REI is for you. And it doesn't put you as much at risk. And do you have the reserves to manage 16 properties from the get go? Good luck.

Diana Dorantes · Answer

@Shay Singh Interesting question.  I have not done this personally but I remember hearing on a BP podcast with @Brie Schmidt that she has purchased multiple homes on a portfolio loan.   You may have to contact multiple banks that will agree to do these types of loans.  Smaller to mid size banks usually better for this.

Shay Singh · Answer

Thank you so much for giving your input on this question everyone!I'll look into the different loan offerings from smaller and midsize banks  @Diana Dorantes.@Kurt K. I've ruled out house hacking for now, but I agree that it's better to start small, get my feet wet, as this is still new to me. In this scenario, I didn't plan on having too much for reserves, because the goal was to get the properties cashflowing (so they pay for themselves).I'll research more into commercial loans and portfolio loans. Thanks for clarifying the different loan types @Shiloh Lundahl and @Brie Schmidt - it seems that I should be sticking to conventional loans for now :)@Marcin Talaga, Yea, using $400K for down-paying a 16-unit apartment building is probably a better idea - I wasn't sure if I'd qualify for a commercial loan, so I wanted to look into this other possibility. But this does seem safer, and I'd rather play it safe. Thanks for sharing your take on this!

P.S. Not sure if I tagged people correctly... Popups did not appear when I typed "@" followed by the name (except one time)..

How can I get homeloans for 16 properties at the same time?

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