Specialist · Tampa, FL · Member since 2018 · 32 posts · 5 votes
I would like to consolidate the 9 30 year fixed mortgage (currently in my name) into one loan and open up a revolving line of credit to move on additional deals.
The nine houses have 70% equity.
I’m a professional engineer by trade, this small portfolio , valued at 2.9 million, took me 15 years to assemble it cash flows very well I’m conservative but interested in how to grow
You didn't ask a specific question but I assume you are asking how do I grow with a 10 loan limit.
Why do you think loans are limited to 10? They are not. Obviously there are owners with not just hundreds but sometimes thousands of properties. You just have to look for different types of loans.
Follow the advice or @Brian G. and ask around for different loan products. I would add to call mortgage brokers and commercial lenders. You could refinance you 9 properties with a blanket loan and then start al over with 10 conventional mortgages again.
I am an OOS Investor. At least it seems to me that dealing with remote local commercial banks is not a good option for me. And I also do not like some characteristics of commercial loans such as balloon feature and higher rates etc. So I decided to well use the only 10 conventional loans.
The first several of my rental properties were all cheap SFR. After I got 6, I did a little math, if each property is $200k, with 10 loans I can only control $2m asset – that's not enough to me. But if I can buy property each worths $700k~1m, with 10 loans I have the potential to control $10m. So starting from the 7th, I started to buy only fourplexs - each worth at least $700k. So far I have always got three, and on the way to the fourth(just signed the contract). And once I reach the 10 loan limit, I will sell the SFRs to make loan space for the fourplex (I already sold two, one with loan and one cash bought). I probably cannot reach the $10m, but I am sure I can reach half of that.
You have lots of equity (far more that I have), just cash out refinance one property can payoff another one so you still have lots of loan limit left. Also, you can choose to sell one once you reach the 10 limit.
Also, do not afraid of cash out each of them ( this year I probably need to do at least 8 loans, some of them were done twice to lower the rates, finished 4, in the middle of 3, need to do one next month, another one not sure ), some of lenders can do several (if not 9 at least can do 4 ) at the same time, you just need to prepare one copy of document but need to sign several copy of loan contracts at the same time. Signing several copy of loan documents at the same time should not be a burden for our hardworking landlords, right? If possible, choose no closing cost loans.
I guess, portfolio loan also have its own problem, like you just want to sell only part of your portfolio.
@Ben Kniesly, if you have a spouse on a W2 salary, then maybe he/she can take a new loan in his/her name, meaning you will have 10 more traditional mortgages to reach the limit.
@J Cicero absolutely that’s why I spent so much time researching setting up a model and contacting brokers the problem is listings that are available to normal unconnected folks don’t make money.
I do enjoy real estate and like the process but it Hass to make money right
@Jenning Yu Great advice and I like your approach with the 4 unit residential higher value properties!
I did consider that and I looked at dozens of three and four Unit  buildings. Unfortunately , this just might be in the Tampa area, nothing made money or enough money.
Prices have been so high for many years and dumb investors are driving them up further making bad deals based on bad assumptions
I’m exploring this portfolio loan now and will not make any decisions until after I weighing the benefits and risks.
cash out refi per home tends to be expensive in terms of fees and I absolutely hate fees.
If I can combine the loans and keep the principal and interest payments the same and free up 500,000 to $600,000 I can grow at my pace ....I love the fact if you have a line you’re not paying on it until you deploy the money versus cash out refi you’re paying for the money while you look for the next deal... I have strict criteria I don’t like losing money and it takes time for me to find deals
I’m betting you’re going to see a 15 % to 20% correction by the end of next year when the Fed stops printing money and the “lag concept “ has a chance to propagate throughout the broader economy. 
@Ben Kniesly @Cameron Tope guys, I have a lender that we use predominantly who can write a portfolio for you guys today. If your LTV is truly 30%, you are the ideal candidates for this. Hell, even if it's 70% you're a great candidate. Happy to connect you - let me know.
Check out CenterState Bank... there is one in Brandon/Lakeland and across central Florida. We were able to do some consolidation loans through their commercial lending department... however be sure to check with your residential lender as to what Fannie Mae considers a Liam to be in your name. (Ie. If you have to personally guarantee the commercial loan, does this count toward your 10 Fannie Mae Properties?
It might come down to how you have the properties titled. Ie. Do you have them in your name (from the residential financing, or do you need to transfer them into an LLC), and if you do, how does Fannie Mae count those. Fannie Mae's lending guidelines refer to "total number of properties you are personally obligated" in the 10 count... so moving them to a commercial consolidation loan may not get you off the hook necessarily.
@Ben Kniesly the deals make money through BRRR on the larger commercial side too. Do you plan to remain "unconnected," as you put it? I hope not. Make yourself into someone who is "connected." I have two mantras on my office wall: 1) Excuses never lead to success; and 2) Discipline never leads to failure.
@Cameron Tope. Well you’re still a step ahead of me do you think your credit union will work with me I’m in Tampa Florida
You have to work at BP to be able to join the BPFCU but there are other credit unions that offer similar benefits even though you are in Tampa. You'll just have to call a handful to make sure you're a good fit.
@Cameron Tope I understand what you're saying, but two things to remember:
1) At the level you're now at, this is the best way to grow your portfolio and the number of Units you own; and
2) Buying larger properties comes with scalability of costs. You may have 20 Units, but only one roof to maintain, etc.
J,
I agree - there are some savings when you own one building as opposed to 20. However, multi-family is a different business and scaling can create headaches and cash issues if not done wisely.
I'm comfortable scaling up more slowly with single family than scaling up more quickly with multi-family.
@Ben Kniesly @Cameron Tope guys, I have a lender that we use predominantly who can write a portfolio for you guys today. If your LTV is truly 30%, you are the ideal candidates for this. Hell, even if it's 70% you're a great candidate. Happy to connect you - let me know.
I would definitely be interested in connecting. Thank you!
@Cameron Tope at the end of the day you have to do what you are ready and willing to do. You need to be able to sleep at night. I totally understand it. Life is a constant growth process and I have no doubt you'll figure out what works for you.
1) Cash out refi on multiple properties. Use the cash for cash purchase. This will not solve the problem since you are at 9 conventional loans and you want to borrow more with conventional lending. It will allow you though to be ready for another purchase or two.
2) Cash out refi on multiple properties and use the money to pay off multiple properties. This debt restructuring will free up multiple conventional loans for you.
3) Use cash-flow to pay off one loan at a time starting with the smallest loan balance first, ie the snowball method. This will free up another conventional loan with each mortgage payoff.
4) 1031 exchange some of your portfolio to continue growing. You can move toward commercial properties (5+ units) and commercial lending.
5) Find a bank that will give you a Heloc on one or more of your properties. This will help you buy more properties but will not solve your conventional lending dilemma.
6) Sell one or more properties and redeploy your capital to increase your ROE (return on equity). With every sell you open up a new conventional lending slot.
7) Take on credit/cash partners who sign for mortgages going forward and do some JVs
8) Find owner financed deals bypassing the banks altogether
For portfolio loans the label is used in 2 ways. There are portfolio loans where you are refinancing your properties into a single loan (commercial product and higher rate) AND there is a bank's portfolio loan where they are not going to sell the loan to fannie or freddie (these limit loans to 10 per person).
SO hate to say it but you just need to look for a bank that keeps the loan in house. Good luck and probably going to be a smaller bank.
I did research on this for my portfolio. We ended up snowballing part of the portfolio and have 9 free and clear. We used portfolio loans for a couple individual (LendingOne, Visio...rates were 7.99%...ugh) and we are going to sell and trade up a couple.
Eat the fish and spit out the bones.
USBank: lines of credit and business credit cards for investors.
Upen Patel: blanket, Federal Savings Bank Dayton Capital, FOAC bundles 7+, Corevest 5, Colony American bundles 5+, Visio 3 to 7 in a bundle, Conventus, Mofin will bundle.
@Kerry Baird when you package multiple mortgages into one loan does that then free up more conventional loan slots or do they count each mortgaged property against you? Thanks!
I have moved several of my properties into ownership in an LLC and have the mortgages with those mentioned portfolio lenders, and they do not show up on my credit report any longer.
To fill in a few more details about the portfolio lenders I have used:
The downsides are higher interest rates (one of mine is 7.99% interest only), $495 for a commercial appraisal (a little higher than conventional appraisal), and probably will have issues getting equity out later. HELOCs on investment properties are possible, but the LLC ownership makes it even more challenging. Two of my favorite HELOCs lenders on investment property (TD Bank and PenFed) don't lend to properties held by LLCs, only personal names. And then one of my loans has a 3 year pre-payment penalty...I refinanced a house that was in our own name and used the cash to buy a short term rental, am planning on keeping the property, so it worked out.
On the upside, the loans were fast and relatively easy. The lenders looked at the properties and cash flow, and not so much at us personally.