Updated about 8 years ago on . Most recent reply
New from Buffalo NY.
This is Maiddo from Buffalo, Ny. My wife and I am interested in buying and holding rental properties. My wife and I are presenting looking for our first property and hope to close on one or more before the end of the year.
I have 2 questions that I have been thinking about.
1. How can you have more than 5 mortgages in your name because the goal is to use the BRRRR strategy to invest. From what I heard from one of the bank we called, you can only have 5 in your name.
2. When is the right time to open a LLC to transfer the properties we are going to buy. Most banks we have spoken to do not lend to LLCs.
Looking forward to learning daily as we invest to create passive income.
Thank you.
Most Popular Reply
@Maiddo Esho
Fannie Mae provides info about how many mortgages they allow. My assumption is that banks will follow Fannie and Freddie's rules. From my understanding of Fannie's website, they allow mortgages on more than 5 properties but require you to have progressively higher reserves to qualify. They also explain what they count as reserves. Here are the percentages from their website. I'll post the links below so you can get more details if you want. UPB stands for Unpaid Principle Balance on your existing properties.
- 2% of the aggregate UPB if the borrower has one to four financed properties,
- 4% of the aggregate UPB if the borrower has five to six financed properties, or
- 6% of the aggregate UPB if the borrower has seven to ten financed properties (DU only).