Financing Multiple Property’s

16 Replies

I’m always seeing forum posts about people having more than 10 property’s or maybe somewhere closer to 100! That’s crazy!

But the first thing that comes to mind is, How do they finance all of those deals??

Doesn’t the bank only allow 4-8 property’s or so under someone’s name?

Someone please let me know how it’s done!!

FNMA allows for up to 10 mortgages in your name.  They have the best rates.  But, it is completely legal to have unlimited number of mortgages in your name, just not all from FNMA.  Some banks, especially the big national ones have a policy that they will not write you another FNMA mortgage if you already have four.  That is their stupid policy, not the law.

Most SF investors will get 10 FNMA mortgages.  Then take a few of them and do a cash out refi into a bank-funded loan.  If they took out 5 properties, they can now go get 5 more FNMA loans.

If you are married you can start separating the mortgages as each spouse can have 10 mortgages.  However, if you put both of you on one mortgage, that counts as one for both of you.

Some lenders may want to see some amount of networth, but it varies vastly from bank to bank.  With Commercial loans, the real estate investment itself qualifies the opportunity more so than the individual.  However, as I said, lender may want to see some liquidity or networth from the individuals. 

Don't let worrying about financing slow you down.  

Originally posted by @Rye Simonett :

@Brian Gerlach can you do endless commercial loans? Even for residential properties?

Sure, if your portfolio/financial position can support growth. Each commercial lender will have their own guidelines, etc. If you make the right lending connection and develop a business relationship, one bank can potentially fund many deals. Don't worry about how your will finance when you scale. For now, focus on acquiring profitable deals and getting the best financing on them (ie conventional loans). 

 

@Rye Simonett , all the posts above are correct.  I am also a fan of the small bank portfolio loan.  A bank or credit union will often provide mortgages to customers and keep them in their personal portfolio.  In these cases, they will only do so, typically, for very low risk mortgages for very low risk borrowers.  This is where building relationships becomes important.  Shop local banks, build relationships, prove you provide them with valuable opportunities, and it will work for all involved.

Good luck!

Originally posted by @Kevin Hunter :

@Rye Simonett , all the posts above are correct.  I am also a fan of the small bank portfolio loan.  A bank or credit union will often provide mortgages to customers and keep them in their personal portfolio.  In these cases, they will only do so, typically, for very low risk mortgages for very low risk borrowers.  This is where building relationships becomes important.  Shop local banks, build relationships, prove you provide them with valuable opportunities, and it will work for all involved.

Good luck!

Isn't portfolio lending technically a synonym for "commercial loans"?

 

Originally posted by @Kevin Hunter :

@Brian Gerlach, you are correct that they are essentially the same but often times come with different underwriting requirements and many times direct rate options

Got it. My strategy like most is to max out my conventional loans! 

 

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