Can Someone Explain Portfolio Loans To Me & Help W/ My Situation

[Danny N.]

I introduced myself last night on another thread and I basically found this site while searching for best ways to utilize my equites and cash to acquire more properties since interest rates are so cheap right now and someone sent me a message about using my investment properties, not my main residence to be rolled up into a portfolio loan. I've never heard of the loan and I bank with chase but would like to discuss such a product with them bc I can't really borrow more based on income bc my income is only $15,000/mo and I have half my taxable income in play on a mortgage on my main residence and a 2nd home my son lives in.

My assets 

Main Residence - $1.4M value paid $450k in 1996, $235k mortgage today

Vacation Home - $700k value paid $450k in 2012, $240k mortgage today

Rental Home - $65k value, paid off $900/mo rent

Rental Home - $50k value, paid off $600/mo rent

Rental Home - $65k value, paid off $700/mo rent

Empty Residential Lot - $300k value, paid off

Cash available - $400-500k

Net worth - $2.5M give or take but I've always struggled getting loans from the bank and its always been such a hassle so I'd like to know what my best option is to buy 1 or more properties and what I realistically could acquire at this point. Also the reason I ask is this, the vacation home my son is in, technically isnt a rental bc I dont think the mortgage allowed that, but he's living in it and paying all expenses mortgage,tax,maintenance so it really doesn't cost me anything. So really I'd like to tap the equity in my vacation home of $400k+, my $300k land thats paid off, and the $170k in rental properties thats paid off.

Thank you for any help you can offer, banks are so intimidating I hate going in and discussing these things.

[Scot Howat]

A portfolio loan (or portfolio lender) is a mortgage that is not sold to the secondary market.  Which basically means that the bank that does a mortgage for you will actually keep the loan and service the payments you make.  Most banks don't do that (Bank of America, Wells Fargo, Chase etc...). 

The best place to find a portfolio lender are small community banks and credit unions in your area.  Just call them up and ask to speak with someone in their loan department, then ask if they sell off their mortgages to Fannie Mae or Freddie Mac, or if they hold on to them.  It shouldn't be too hard to find a couple of them in your area.

[Danny N.]

Thank you scot, what are the terms on such a loan if you dont mind me asking before I shop around. Also I assume you mean a place like regions bank here in texas or something even smaller like a private bank? Also do they only lend vs the paid off properties I have or could I also use the equity in my 2nd home? Thank you

[Michael Le]

Hey @Danny N., the nice thing about portfolio lenders is they all have their own criteria. So all of your questions is a 'maybe'.

I have used Smart Credit Financial Union in Houston for a short sale that they kept in their portfolio and did not sell off to Fannie/Freddie. I've never used them in putting all my properties under a commercial loan or anything but you might want to give them a call.

[Danny N.]

Thank you for your response. I just spoke with a small bank here in houston and they can do the 3 rental homes in houston and the land at 75% for the homes and 60% for the land but the 2nd home where my son lives they cannot do bc its in another state. Do you know anyone in houston who would bundle all of the local properties as well as the one out of state?

[Chance Housos]

Try 5arch. I just refinanced 5 properties with them on Monday. They will lend 70% of value for 30years. 

Also, I know Prosperity bank will do blanket loans as well. They were offering 75-80% of value with shorter terms. 

Can you do a HELOC on the vacation house?

@Danny N.

@Danny N.

[Shelly Herkner]

@Scot Howat, @Danny N., @Chance Housos

Hi guys...would you mind sharing with me what kind of interest rate are you currently getting or being quoted?

[Daniel Dietz]

@Shelly Herkner up here in Wisconsin we are getting 4.5% with a 10 year lock, 20% down and 25 year amortization. From what I see in other threads that is better than what a lot of people are able to find. Small local bank that is very investor friendly. 

Dan Dietz

[Dean Schwertfeger]

@Daniel Dietz What bank are you using in Wisconsin? I am currently looking for a new lender. 

Thanks

Dean Schwertfeger

[Scot Howat]

That's pretty typical.  I found a guy locally (IL) that'll do similar rates and terms.  But I'm sure if you call around you can find someone that'll do 30 year terms.

@Danny N. you should go to a few local REI clubs and talk to a bunch of people there. I'm sure you could find the bank that you're looking for that way.

[Daniel Dietz]

@Dean Schwertfeger,

We are using Dave Cooper @ Paper City Savings in Wisconsin Rapids. I think he is actually in the Plover Branch. I learned of them through our local Apartment Association. I think they do anywhere in the state most likely as I am almost 2 hours away from them. He has been great to work with so far, and is an investor himself too.

Dan Dietz

[Scott Schultz]

@Dean Schwertfeger talk to Craig Lau at Peoples State Bank in Rhinelander (down town) I work with him on my stuff, they run mine as commercial loans, way easier than jumping through all the hoops, and rates are quite competitive. 

[Percy N.]

Danny N. see if the commercial dept of the portfolio bank will extend a commercial Line of Credit across all the assets.