Financing question for buy and hold investors

9 Replies

My banker is telling me that getting financing for more properties after the 5th one is a problem and I have to go through some kind of commercial lending deal. What have you guys that have more than 5 properties done to get financing for the additional properties?

no, do a search and you will find much information.

You can get up to 10 conforming mortgages in your name, however many banks don't do over 4,,this is a good reason to find a mortgage broker that works with investors

I agree with Andy. It is my understanding you can get 10 mortgages but after 4 you may have to put down25% instead of 20% or whatever amount more.

You have reached your limit with this banker for the time being, Time to look for another banker or mortgage lender is a good idea also. Another idea if these are long term holds see if you can find someone to wrap the exiting loans in to one for you. This will look better for you when applying for your next deal.

Dang that was fast! I think I am going to like this place!!!

@Craig Smith

Yeah, BP is awesome. Welcome, welcome.

For MFH my experience with the current system is 25% down for the 1st 4 buildings. 30% down in the next 6. Some banks have told me that they require 9 months of reserves for 5-10 instead of 6 months.

@Craig Smith

We are also buy and hold investors. We are purchasing our 5th property next months. We found that after 4 your mortgage broker is important! We have had to use a priority of brokers to get to our goal.

I have 11 mortgages. One is my personal.

u can get up to 20 mortgages if the homes are homepath

Regarding the commercial aspect of your question, yes once you've reached the 10 property limit for secondary market financing or any other limits with others like Homepath, you can still get commercial loans for your rentals. The biggest difference is that the interest rate isn't fixed for 30 years. In most cases, you're looking at between 3-7 years of a fixed rate with a balloon at the end of the term. This is when its nice to build a relationship with a local, small bank, commercial lender who lends on single family and/or multi family.

Gonna have to find another banker willing to extend you credit. Shouldn't be that difficult IMO.