Portfolio lender vs. Commercial lender
My husband and I have been investing in buy and hold rentals for 3 years now and we currently own 7 units across 3 properties. We have steady income as professors and strong credit ratings. As of this year our tax returns show rental income for the last 2 years and currently we have approximately $200K in equity across all of our properties.
I would like to move away from my traditional residential lender and start a relationship with either a portfolio lender or a commercial lender so that we can pull out some equity from our current properties for a down on a 20 unit in our area which is offered to us with seller financing and to build a long term relationship as our business grows.
Can anyone tell me what the difference might be between a portfolio lender and a commercial lender or are they essentially the same thing?
I plan on making calls one by one to all of the local banks in Northeast Michigan to ask whether they do either one or the other (portfolio vs. commercial lending) and whether they would be interested in working with us but I wanted to find out what the difference is before I do that. Any details on this would be tremendous! Thanks!!
Originally posted by @Avi Garg:
@Dante Pirouz Why would you want to pay higher interest rate by going with portfolio/commercial lenders (they are usually the same) plus they would want to have your properties in LLC.
Why not do a HELOC or a cash out refinance to access the equity?
This is simply not true. I'm a loan broker for a private and portfolio lender and they do not demand LLC ownership.
@Mike Dymski hey Mike, I found your advise interesting and helpful. I have some additional questions about structuring a loan on rental property. If you have time I would love to connect.
Thx.
@Dante Pirouz hello Dante, I would love to connect and pick you brain, I’m maybe 2-4 years behind you as far as rental unit. I’m in the metro Detroit area and had a similar question to yours on the commercial loan and not hitting your personal FICO. If you have time, I would love to connect with you.
Thx.