Financing a portfolio of 5 single family rental homes

[Hayden Burke]

Hello everyone! 

I am currently evaluating my possible 2nd investment deal- a portfolio of 5 single family homes all side by side in a small North Carolina city. This is new territory for me buying more than 1 home in a deal. Asking price is $289k, however I believe they could be purchased for around $260k. All homes are older but in great shape structurally and some simple cosmetic improvements will go a long way. Currently the average rent across all homes is $710, with 2 units renting well under market value. That, along with a company bringing 1,000 new jobs into the small community, brings a lot of upside to this deal- and is already cash flowing well on its own. Current owner seems to have his hands in a lot of investments outside of real estate and hasn't given this portfolio the full strategic attention that he could have.

I'm seeking advice on financing this deal, being this is 5 separate homes. So far I'm being told by realtors and a few clicks of online research that a commercial loan, 'blanket loan' is what I'm looking for, but I'm sure there may be other/better options? I'm looking to put about $20k (~7.5%) down at most, so that also has some limitations to some of the types of loans I have looked into thus far. What other options has the BP community dealt with for a deal of this type?

Thanks, 

-Hayden

[Daniel Federico]

Hayden,

I think a portfolio/blanket loan is definitely an option for you on this deal. That loan will put all 5 of those properties under one loan and could be a good option for you.