I closed on my 4th rental property today, cash. My other three rentals and my primary residence all have mortgages (no second mortgages, HELOC, etc.). I am interested in taking out a first mortgage, HELOC, refinance, etc. in order to pull the cash out for the next one. I know lenders can approve more than four mortgages, dependent on the bank/credit union overlays, but wondering who has had success landing 5+ mortgages and any recommendations as to who to use and what is the quickest, easiest, and most cost effective way to proceed?
My rentals are all in Florida and my primary is in Oregon. I have a solid credit score, two years tax returns including two of the properties, and one year tax return including all three properties (we have had one rental for 27 months, another for 20, and the other for 13 months). We have zero missed payments from tenants, no partial tenant payments, and have leases that take all three rentals past the first 24 months we owned them.
Now, with a brand new rental that should be up for rent in a week or two, who should I approach about financing the free and clear home, and what is the best avenue of approval?
@Luke Miller your first call should be to a local lender/bank with a commercial lending dept. In all honesty you should already have their head of lending or their "commercial guy" on speed dial considering you have several properties. Do you use a local bank for your checking accounts? Business and personal. You really need a relationship w a local bank who will keep a lot of loans in-house and not care how many mortgages you have as long as you pay your bills ontime, keep sufficient equity, and keep your credit in good standing.
@Rob Beland , thanks for your advice. I bank with Navy Federal Credit Union and USAA so, neither local to me, but I probably need someone local. I'll start making some calls based on your feedback and see where that takes me. NFCU keeps mortgages in house, but they are really strict. But, there is no harm in trying to see what they and others can do. Both banks/CUs have been great to work with, but it would be helpful to have that local connection as well.
Thanks a lot,
Here is some info on cash out financing.....
You can count the rental income from the start.... If you are Looking to cash out on more than what you paid for the property....... You will have to wait until 6 months past closing.
Thanks @Jerry Padilla ,
I forgot to get back to you and say thanks for the advice. I found out that because we already have 4 mortgages we are in the delayed financing scenario for #5. It took two months to find a decent lender who is licensed in Florida and now we are trying to push things through before we cross the 6 month threshold.
My credit score is hovering right around the 720 mark (age of credit history is the negative factor) because of new accounts opened in the past 24 months. CCs are below 9% and we have nothing holding our score back besides the length of history. I think we will get a bump "up" in length of history within the last 30-45 days of delayed financing period. However, it is a close one, and has definitely been a learning experience.
I just want this thing done so I can move on to the next property.
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