Dilemma: should I use commercial loan for future deals?

[Allen L.]

Hi guys, I have been purchasing rental properties in TX and GA using conventional mortgage, but I'm thinking at some point in the future I want to purchase my own primary residence, and afraid that if I keep buying rental properties and maxing my leverage using my W2 income I will be too levered to buy my own residence.

As someone that recently started out, I use conventional mortgage because of the lower interest rates and my lender doesn't charge me any origination fee (although not a fan of 25% down on small multi). My plan is that whenever I decide to buy a place myself, I'd refinance the conventional loans into commercial loans so they are off my credit records. However, I read commercial loans are generally 20 years, has higher interest, cost points, and also runs the risk of not appraising the full value. It's my understanding that commercial loans generally require 1.25 DSC, and as someone that recently entered REI in 2018, a lot of the duplex and SFH don't meet the commercial lending requirement because the large metro markets appreciated faster than rent in the last 4 years in an rising interest rate environment.

What are some other options that I could do to remove the rental loans off my credit records? I heard about portfolio lenders as smaller banks that keep loan on their books, so what if I use portfolio lender, do these loans stay on my credit record? 

[Chris Mason]

Originally posted by @Andrew Postell:

@Allen L. a good lender should be using all of that rental income to help you qualify.  In theory, the more rental properties you receive the BETTER you should look to a lender....at least, to a lender that is friendly towards investors.  Even with conventional loans.  You can even go beyond that 10 loan limit as long as you are buying your own primary home.

 This is 100% the right answer.

For a primary residence, the Fannie "cap" of 10 financed properties does not apply. Per Fannie: