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.
@Kerry Baird so it sounds like owning props in an LLC and changing the loan from conv to commercial or portfolio frees up more conv loans? Do you have to admit ownership of the properties in LLCs during the lending process for more conventional loans or is it more of a don't ask don't tell situation? Or is it a lender specific issue where some care and some do not? Thanks for sharing!
Yes it allows us to do more conventional mortgages, @Brian G.. I do show my lenders a spreadsheet with my REO (real estate owned) which I categorize by houses we own in our own names, houses in the new LLC and haven't hit our tax return yet, and houses where we have the K-1s from previous tax returns. It is the tax returns that show those properties. I'm working on a conventional refi right now of our own house, and the lender asked to see the REO spreadsheet and wanted to know all of the rents/insurance/property taxes for all the properties. Sometimes they ask for entity formation documents, too.
@Kerry Baird sounds almost as fun as going to the dentist office! What systems do you use for property management, book keeping, organization of documents, etc? You must be an organized person!
With 300 dollars per property (2 months of work to buy a turnkey rental) you are going to need 20-40 of these to replace your income. I had 11 of these and good systems in place but still had 1-2 evictions a year and 3-4 big things that were normal annoyances like plumbing leaks, damages from hurricanes, or some vandalism. Image if I had 30, just 3 x those numbers.
Directly investing in a turnkey rental or small MFH is a good way to start to learn and build up the war chest to go into my scaleable investments such as private placement syndications. Whatever you do, try to be as close to the investment as possible.
@Brian G., I can really improve on organization! Lol We use Excel spreadsheets, property managers, a good CPA. I think a bookkeeper is next, and a cleaner for the vacation rental side of things.
I have about 20 properties, but only two conventional mortgages. The rest are either in a commercial or asset-based loan.
Conventional is the best 30-yr mortgage you can get due to low rates/fees and no prepay. But it's also the most headache to get. As you know, the more properties you own, the more of a headache it is. Plus right now it's just extremely slow; I'm in my 5th month trying to cash-out refinance a free and clear property in MO. Each passing month I need to provide new bank statements, mortgage statements, etc. It's very frustrating.
Commercial loans have some nice rates too, but still bank-like in that they want to see tax returns, PFS, etc. and qualify a global DSCR (which is not unlike DTI). I also hate that they rarely give more than a 5-10 year term (with < 30 year amortization). The shorter amortizations sometimes make it harder to meet their DSCR requirements.
The asset-based loans have been a blessing. So fast and easy; it was almost like getting a hard money loan. I closed in 2-3 weeks. They didn't look at my personal income or care about the other properties I had. And these are full 30-yr loans to LLCs! The two biggest downsides here are the 3-year prepayment penalty and the higher rates. Pre-COVID, I was able to get a loan at 4.75% interest, but nowadays it's looking like mid to high 5's. Still, these are my loans of choice because of the time and headache factor... and closing confidence.
At this point I just don’t feel like there are any deals that cash flow , thats the essence of real estate investing.
Considering my goals and scale getting a home equity line of credit on one of my investment properties would be the silver bullet
I’ve contacted some folks , most don’t touch Equity lines on investment properties... and the ones that do limit you if you have over four mortgages and I have 10.
This point I’ve resigned myself to paying down debt. Let me know if I’m off base. Thx again 
I know of private lenders that do 30-year mortgages and since these aren't reported on credit, there's no limit. Also, approval is much easier than banks.
Do you funnel your properties through an LLC? Maybe you can transfer mortgages to an LLC to free up your name for more mortgages? Im not sure if this even viable.
Another option if your homes cash flow so well is to just sit tight and pay off a mortgage. Then HELOC it and buy houses cash with the heloc. With your portfolio there is definitely a way.
A 3rd option is find a lartner who you can give a bit of equity to and put mortgages in their name. Parents? Siblings? Your wife?
How did you go about lowering your rate for free? Ive thought about calling my lenders and “asking them to lower the rate or ill refi with another bank” and see what they do.
80/20 rule. Might want to think about selling your least favorite(s) to manage or those with upcoming capex. Over here it’s a hot sellers market. 1031 with the gains or just pay the tax.