Updated almost 8 years ago on . Most recent reply
What are the LOOPHOLES about an All-Cash vs. Conventional loan?
We are closing on a deal on a passive income property and wanted to know what are all the loopholes?
- Property is in Memphis.
- Property is worth 100k.
- Plan on purchasing 15 properties.
- 7% ROI
What are the ad/disadvantages of the closing?
What are the ad/disadvantages of refinancing?
What are the ad/disadvantages moving it to an LLC?
What are the ad/disadvantages of moving it to a commercial loan?
Most Popular Reply
If you plan on purchasing 15 properties, watch your loan count. If you stick with 1-4 unit properties, try to get conventional financing to take advantage of the best rates and terms. Your first 4 properties will go smoothly like butter. Properties 5-10 will be incrementally harder, but still can be done. Once you get to 10, the conventional train stops, and you have to switch over to Commercial.
So, IF there is a way for you to pay off loans to stay under the 10 count, DO IT. Stay in the conventional loan realm.
Obviously, if you go over 4 unit properties, you HAVE to obtain a commercial loan. In that case, just shop lenders. There can be a spread between them for rates and terms. Also, local banks may be better. Not always, but in may cases.