Are Commerical Loans also Conventional Loans?

[Eimen Ung]

Hi Friends,

Are Commerical Loans also Conventional Loans? I know you can get up to 10 conventional loans at one time. Right now we have 2 commerical loans for self storage (they are not SBA) -- do they count towards the 10 conventional loans, or how to you find out? Thank you!

[Jason Wray]

No, Commercial loans do not count as conventional "residential loans" but keep in mind not all banks. credit unions or lenders allow you to have 10 conventional loans. There are some banks/lenders that will cut you off once you get to 6-8 properties even if you DTI is in line.

Once you hit 10 loans if you get there or close to 10 around 8 for example you will want to start looking into a "Portfolio loan" which is a true commercial loan.  That loan is also kown as a "Blanket loan" where they take usually 4 doors or 4 properties minimum and they blanket them all into one (1) commerical loan, that 'Does Not report to credit.

That will free up all or some of your mortgage trade lines to start all over again so you can use conv/traditional loans. You also have the ability to get 6-8 loans and then switch to Non/QM and get some DSCR loans for investment rental purchases.

You will also find it very hard to get 8-10 properties if you do not have a good "Investment (REI) CPA or Tax preparer. Some CPA's really hurt RE investors who have multiple properties by crushing their NOI and net rental income on their Schedule E. Shedule E, Scheduel C's and your overall net income are crucial in keeping your DTI in line and allowing banks/lenders the ability to use Maximum personal, business and passive income.