Real Estate Investor · Columbus, OH · Member since 2011 · 12 posts · 1 vote
I currently own 13 single family properties in Columbus Ohio recently appraised at 1.1 million. I have just under 500 K in mortgages. I have exhausted the yellow pages and am searching for this product. Fannie Mae guidelines page 223 say that whatever properties are deeded and mortgaged to an S-Corp are exempt from 10 property limit. However, there are no mentionings of the deed and mortgage in the name of an LLC?
Has anyone done this to circumvent the ten property rule?
I found one lender will do this with over 1 million in mortgages but that's it.
High 600s credit
110K day job
All properties cash flow 400-600 monthly with solid track record.
The Fannie Mae guide says that LLC holdings are not exempt from the 10 property limitation. Of course, you can only get Fannie Mae loans in your individual name anyway, can't get them through a S-Corp or LLC. Is your strategy to transfer existing Fannie Mae loans to an S-Corp, so that they will not be counted, freeing up room to do more conventional loans?
Yes The idea is to refi them into an s corp or LLC in order to free up slots to continue to buy w traditional Fannie loans and clean up my portfolio. I can't even get a primary loan through Fannie only FHA.
So only mortgages in an S-Corp would accomplish this?
If you refinance them into a business entity, the new loans can't be conventional (ie. secondary market, fannie/freddie) loans. Conventional loans can only be taken out in the names of individuals. You would have to go to a local bank and obtain a portfolio loan, to borrow in an entity, and local banks will not do these as long-term fixed rate loans.
I assume your angle is to try and get more long-term fixed rate conventional loans. There is no way to get more than 10. Only possible exception is that conceivably your spouse could take out some loans in her name, if she was able to qualify completely on her own, and if she is not reflected on the current 10 loans, but this would be an unusual and unlikely circumstance. And that is if you even have a spouse :)
You are going to have to use a local bank lender offering 5-7 yr balloons or 5/1 ARMs going forward, as this is the course most take for growing their rental portfolio these days, as well as the use of private lenders, owner financing, and sub-to deals.
My mortgage broker there is one way around this. Double check with your own broker. He said if I had 10 loans in my name, my wife could take out 10 loans in her name. If you want his name, send me a message.