Investor · Princeton, NJ · Member since 2013 · 77 posts · 3 votes
There are 4 single family properties I want to purchase. The total price is going to average $50k to $60k each. They are not together or being sold as a package. I plan to put 20% down on each one. I want to finance them with the rents paying the loans. I'm told that no mortgage company is going to finance a $40k-$50k house. I'm wondering if there is a lender that would allow me to bundle them together and finance the 4?
Or any creative ways to finance them all together?
You'll likely need to find a local credit union that would be willing to lend its portfolio. FNMA/GNMA etc have a min amount of $50k. That means that originators won't be able to sell the loan in the secondary market (at least not easily). So you need a bank that extends its own balance sheet.
Call a bunch of banks, you'll get 99% "No's", but eventually someone will say yes.
There are 4 single family properties I want to purchase. The total price is going to average $50k to $60k each. They are not together or being sold as a package. I plan to put 20% down on each one. I want to finance them with the rents paying the loans. I'm told that no mortgage company is going to finance a $40k-$50k house. I'm wondering if there is a lender that would allow me to bundle them together and finance the 4?
Or any creative ways to finance them all together?
Tough to find a lender to do that.
When you talk to lenders the term you want to use is "cross collateralization". I don't recommend it, but some people use it. If you run into trouble in the future you could lose all 4 properties.
Instead, I'd see if each seller would let you take over the mortgage, pay the owner their equity and they move on with life. Have an attorney create a Wrap (it's a note with deed of trust) for each property.
This was actually on the podcast that @Brandon Turner and @David Greene did with newcomers recently. Guest did get financing on $25k property from local bank. Talk to local banks!
You'll likely need to find a local credit union that would be willing to lend its portfolio. FNMA/GNMA etc have a min amount of $50k. That means that originators won't be able to sell the loan in the secondary market (at least not easily). So you need a bank that extends its own balance sheet.
Call a bunch of banks, you'll get 99% "No's", but eventually someone will say yes.
You'll likely need to find a local credit union that would be willing to lend its portfolio. FNMA/GNMA etc have a min amount of $50k. That means that originators won't be able to sell the loan in the secondary market (at least not easily). So you need a bank that extends its own balance sheet.
Call a bunch of banks, you'll get 99% "No's", but eventually someone will say yes.
You'll likely need to find a local credit union that would be willing to lend its portfolio. FNMA/GNMA etc have a min amount of $50k. That means that originators won't be able to sell the loan in the secondary market (at least not easily). So you need a bank that extends its own balance sheet.
Call a bunch of banks, you'll get 99% "No's", but eventually someone will say yes.