How do you get more properties past the mortgage limit?

[Eli Kim]

I just bought my first property a couple months ago and I’m planning on getting my second very soon. I wanted to know how you guys get more properties past the mortgage limit? I know some lenders won’t even give loans after 4 mortgages. What is the best way around this? I also got the first property under my name and I plan to get the next few under my name. Thoughts on this? 

[Ash Hegde]

When you reach a limit with conventional loans in your name (either because of debt to income ratio or 10 property limit) your next best option is to buy with an LLC and get a DSCR loan. These loans are based on the property rents vs mortgage payment and ignore your personal income. They have higher rates and fees than conventional but you can keep your portfolio growing.

[Eli Kim]

Quote from @Ash Hegde:

When you reach a limit with conventional loans in your name (either because of debt to income ratio or 10 property limit) your next best option is to buy with an LLC and get a DSCR loan. These loans are based on the property rents vs mortgage payment and ignore your personal income. They have higher rates and fees than conventional but you can keep your portfolio growing.

Would you say it’s okay to continue buying under my personal name for now? Or should I transfer my current property and future properties to LLC? 

[Eliott Elias]

Using DSCR, hard money, and seller finance.

[Ash Hegde]

Nothing wrong with keeping them in your name, though I would look into umbrella insurance to help protect your personal assets if you go that route. 

[Bill Brandt]

Wait until you have 9 loans and you e got more property than 80% of the people on BP. Then either 10 in spouse’s name, refinance the most equity ones to pay off the lowest balances, or get portfolio loans from local banks/CU’s, sell cheapest 2-4 for one nicer property, bring in partners, use seller financing, etc etc etc. 

If you can find 10 good deals at todays interest rates you’ll figure out a way to make it work. 

[Eli Kim]

Quote from @Ash Hegde:

Nothing wrong with keeping them in your name, though I would look into umbrella insurance to help protect your personal assets if you go that route. 

I was thinking that but I do have liability insurance. 

[Kerry Noble Jr]

Have your significant other thats not your spouse grab as many as they can before you get married......children....and also partners

[James Hamling]

Quote from @Eli Kim:

I just bought my first property a couple months ago and I’m planning on getting my second very soon. I wanted to know how you guys get more properties past the mortgage limit? I know some lenders won’t even give loans after 4 mortgages. What is the best way around this? I also got the first property under my name and I plan to get the next few under my name. Thoughts on this? 

 What will we do if China invades Taiwan? 

What will we do if sasquatch is found and claims native rights to the Pacific NW? 

What will we do if the Vikings ACTUALLY EVER win a freakin Superbowl......... 

Hey, here is a crazy idea; how about worry about problems, when they become a problem. You got 2 properties, your miles away from this being an issue, so how about ya worry about todays problems, the ones impacting now. 

All this garbage on DSCR, or WTF Hard-$ for a standard rental, no way anyone is that stupid. Look, forget that BS, because it's obviously from people who don't have 10+ properties. DSCR maybe, MAY-BE but even then almost never. DSCR is more for people who don't have the $ or credit to get a place and are going for a whatever means is possible to get it and are betting on the rev. to make it work, so really it's a high leverage play, and expensive to do it also.

For a look ahead, what most do when nearing that point, we EVOLVE. When you have enough properties to be at that point, you don't want to use that mortgage mechanism anyways. We go PORTFOLIO lending. We got enough properties, equity and revenues, where we interview various small and mid-sized regional lenders to land on one we will pair with. 98% of the time this has a component of Portfolio lending. 

Generally they refi our properties into there holding, a common action is putting a grouping of them into a commercial in-house held mortgage. And than, if doing it smart, we get a line of credit, say $500k, that we can just grab as cash whenever, to secure more properties as all-cash offers, and once closed our lending partner will just finance us out and replenish that line of credit. Rinse and repeat.  

We don't do hard-$ for standard rentals EVER, that's the worst advice literally ever. 

So once a person get's to scale, it's an evolution point and your banking relationships evolve. We come to work with the VP of lending, not a loan officer. We submit deals for the board to review, not some schmoe at a desk. Because at that point we are no longer just some borrower, we are a full-fledged business, and it is a business relationship, business lending. So we leave the O.O. lending world and move into business lending world. 

It's an evolution point. 

BUT, again, worry about developing the cure for cancer before you worry about what your kiosk will look like for selling it. Horse, cart, keep em in order. 

[James Hamling]

Quote from @Bill Brandt:

Wait until you have 9 loans and you e got more property than 80% of the people on BP. Then either 10 in spouse’s name, refinance the most equity ones to pay off the lowest balances, or get portfolio loans from local banks/CU’s, sell cheapest 2-4 for one nicer property, bring in partners, use seller financing, etc etc etc. 

If you can find 10 good deals at todays interest rates you’ll figure out a way to make it work. 

 Can you believe some people said use hard-$, lmao. What in the actual F***. 

[Eli Kim]

Quote from @James Hamling:

Quote from @Eli Kim:

I just bought my first property a couple months ago and I’m planning on getting my second very soon. I wanted to know how you guys get more properties past the mortgage limit? I know some lenders won’t even give loans after 4 mortgages. What is the best way around this? I also got the first property under my name and I plan to get the next few under my name. Thoughts on this? 

 What will we do if China invades Taiwan? 

What will we do if sasquatch is found and claims native rights to the Pacific NW? 

What will we do if the Vikings ACTUALLY EVER win a freakin Superbowl......... 

Hey, here is a crazy idea; how about worry about problems, when they become a problem. You got 2 properties, your miles away from this being an issue, so how about ya worry about todays problems, the ones impacting now. 

All this garbage on DSCR, or WTF Hard-$ for a standard rental, no way anyone is that stupid. Look, forget that BS, because it's obviously from people who don't have 10+ properties. DSCR maybe, MAY-BE but even then almost never. DSCR is more for people who don't have the $ or credit to get a place and are going for a whatever means is possible to get it and are betting on the rev. to make it work, so really it's a high leverage play, and expensive to do it also.

For a look ahead, what most do when nearing that point, we EVOLVE. When you have enough properties to be at that point, you don't want to use that mortgage mechanism anyways. We go PORTFOLIO lending. We got enough properties, equity and revenues, where we interview various small and mid-sized regional lenders to land on one we will pair with. 98% of the time this has a component of Portfolio lending. 

Generally they refi our properties into there holding, a common action is putting a grouping of them into a commercial in-house held mortgage. And than, if doing it smart, we get a line of credit, say $500k, that we can just grab as cash whenever, to secure more properties as all-cash offers, and once closed our lending partner will just finance us out and replenish that line of credit. Rinse and repeat.  

We don't do hard-$ for standard rentals EVER, that's the worst advice literally ever. 

So once a person get's to scale, it's an evolution point and your banking relationships evolve. We come to work with the VP of lending, not a loan officer. We submit deals for the board to review, not some schmoe at a desk. Because at that point we are no longer just some borrower, we are a full-fledged business, and it is a business relationship, business lending. So we leave the O.O. lending world and move into business lending world. 

It's an evolution point. 

BUT, again, worry about developing the cure for cancer before you worry about what your kiosk will look like for selling it. Horse, cart, keep em in order. 

Most real answer I’ve ever heard. Thanks.