Portfolio Loans for Single Family Rentals

[Niti Jamdar]

Hi All,

Thanks for making Bigger Pockets a wonderful community where I learn something new every day!  I was hoping to get some advice about portfolio lending for single family rentals.  To give you a quick background, I'm a working professional with a W2 income, investing in single family rentals in the Philadelphia area.  I have 6 rental properties (profitable) and all of them have been 30-year fixed mortgages.  As I'm getting close to the 10 loan limit (I have 7 loans including my primary residence), I'm hoping to expand my portfolio in the next 2-3 years, and therefore trying to figure out what my options are for obtaining loans beyond the stipulated limit of 10 loans.  

I have heard the local credit unions may be willing to provide portfolio loans.  I have a few questions: 

• Based on your experience, are credit unions my best option?  Are there any other sources that I could tap?
• And if so, how do I go about approaching these credit unions?  Do I need to share some sort of P&L to show them that all my properties are profitable?  
• Do you have any tips of how to get the best loan terms and interest rates from the credit unions?  
• Does anyone recommend a particular credit union in Philadelphia?  Any advice would be super helpful.

Thanks in advance for your help!

Niti

[Loren Davy]

Portfolio lenders are tough to find, but they are out there so keep looking. Look at credit unions and local banks (2-5 branches). You say each property is profitable, put them through the BP calculator and print them; now you have actual number to show a lender that they are profitable. Also create a balance sheet that shows property value, loan amount, int rate, total payment,principle payment, int payment, insurance payment, and LTV (let me know if you want an example). A lender can look at the balance sheet and make a quick decision, then dig into each property if they want. Also have past two years of taxes and be ready to provide two months bank statements of business and personal checking accounts.

If you can't find a local portfolio lender, there are some national lenders that will lend on 5 or more properties. But, these are commercial loans; higher int rate, lower LTV ratios. Check out RCN Capital.

Let me know if you have any questions. Good luck.