Loan for multiple SFD rentals in rural community

[Michael Thorne]

Hi BP community -

I am looking at an opportunity to purchase 6 small houses in a small community in northwest area of central Texas.  They are relatively inexpensive from 40k - 80k.  Would a portfolio loan be used to bundle these properties together and buy them as a package?  What experience can you share or guidance on a way to finance all properties together?  Any recommendations on a lender to talk to?

[Jay Hurst]

@Michael Thorne    Yes, we have financed the portfolio of properties for investors with our balance sheet short term loan giving credit for the current value. For example, in your case  assuming 6 properties were worth 450k but you were able to buy them for360k that difference might be most if not all the down payment required.  In other words, very little or no cash might be required.  We then turn around and immediately refi the properties individually to a fixed rate loan using the same appraisal on a rate/term loan which means you can use the current value right away.  So, long story short, you buy  the properties AND get into a 30 year fixed loan with no where near the usual required cash outlay. of course making your cash on cash returns pretty damn nice. 

All of this of course depends on a number of factors including tight appraisal's which can be tougher in rural areas but an example of what we have done in the past a number of times.