Small Portfolio Loans... Even Possible?

Question

I have a Condo that I'm looking to buy with a partner.  But it looks like the property wont be warrantable because about 50% of the units are currently rentals.  I've been told that a Portfolio Loan could work in this scenario.

The problem is the property is only about 80K.  Are there any banks/lenders that would be a sub 100K portfolio loan?  Or am I stuck to HML / Cash only?  Is it even worth it to the bank to loan on such a small amount?

If anyone has any suggestions, I'm more than willing to listen.  I'm in Arizona if that makes a difference.

Chris Martin · Answer

I have financed lots of them (dozens) over the last decade through our commercial lender. We packaged them up in a tranche with SFR and townhomes, usually 6 to 8 at a time... all were well under $80K individually, but the tranche was usually $250K to $350K or so. So, yes, it's definitely possible.

Stone Jin · Answer

Their PQF said Sun American Mortgage.  I've never heard of them before so buyer beware.

Stone

Stone Jin · Answer

I'm selling a couple of condos in Chandler in a high snow bird/second home/investor community.  My realtor said that one of the buyer's lender stated that the condo questionnaire is not needed since their down payment was over some percent.   Maybe something worth exploring.  My sales price point is a bit higher than your price point but not much higher so there are lenders willing to do condos sub 100K without the questionaire.  I don't recall the exact company, but if I find it I'll post to this thread.

Best of luck,

Stone

Justin Owens · Answer

@Paul G. Thanks for sharing and reminding me of the downsides of a condo vs. townhome/SFR/etc.

Buying it is a chore with financing and selling it will be just as difficult for the buyer to obtain financing. If it cash flows great and you don't mind hanging onto long term it might work but there is no quick exit but a cash buyer; and they usually expect a discount.

Best of luck with your quest!

Paul G. · Answer

@Bob Okenwa Thanks.  I will definitely give them a call.  They are actually right down the street from my primary house.

@Chris Martin

I'll have to look into that.  I've never heard of bundling that way.

Bob Okenwa · Answer

@Paul G.

Try 1st Bank. I spoke with a loan guy there not too long ago and he said they do portfolio loans and don't have a minimum loan amount, but did mention some stipulations regarding condos and their occupancy rates.  Also try Bank34. They also do portfolio loans. Good luck.

Small Portfolio Loans... Even Possible?

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