Financing options once you pass the 10 house residential limit

Investor · Raleigh, NC · Member since 2016 · 10 posts · 1 vote

We are coming up on our 10th house and our previous financing guy said once we get to 10 he can no longer assist. He mentioned commercial lending, paying off our lowest mortgage to buy another house and portfolio lending. Not sure much about any of these or other options. Does anyone have any experience or advice on strategies after the 10th house? Seems like paying off a mortgage to buy one slows down the movement of money the most.

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James WilcoxBusiness Member
Real Estate Agent · Bowling Green KY ~ Lexington, KY · Member since 2015 · 1k+ posts · 603 votes
9y
Maybe try a very small bank with only a few locations. Sometimes they have outside investors and they can work it around to get you a few more. You might also try to start focusing on owner financing.
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Ryan Dailey
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Investor · Raleigh, NC · Member since 2016 · 10 posts · 1 vote
9y
Great, thanks @James Wilcox. I went to a smaller bank this week and they mentioned only option was commercial which offered shorter terms and slightly higher rates than residential. I'll try a few more this week. Any guidance on what portfolio lending is?
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James WilcoxBusiness Member
Real Estate Agent · Bowling Green KY ~ Lexington, KY · Member since 2015 · 1k+ posts · 603 votes
9y
That is basically what I was referring 2. They have contacts to outside portfolio lenders. Not in all cases but sometimes they have those leads to get another property or 2.
General BP link for portfolio lending.
https://www.biggerpockets.com/renewsblog/2008/07/10/why-portfolio-lenders-are-important-to-investors/
Maybe if you are married you could even try putting some in your wife's name. Depending on how you have everything set up of course.
Yes, you are going to likely have to pay more because you are now a higher risk target because you are pretty leveraged. That just comes with it. You could also combine 5+ properties into one commercial loan (terms/rates of commercial) and that could free up some spots for more properties like you are used 2. Basically just having a open conversation with lenders will help understand and see what they can do. Keep in mind the guy you are probably talking 2 knows little about what you are asking (since not many people ask about this type of scenario) and it really is, at the end of the day, the underwriters call. Working with investor friendly lenders always makes life easier.
However, ultimately you are at a point where you really start to get more creative. Yet with that many properties that isn't a horrible problem to have. :)
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