How to do a portfolio loan for multiple less expensive properties
I found a seller in a small town who owns 9 rental houses (11 units total since 2 are duplexes). The houses average around $33,000 per property so let's say I could purchase the whole bundle for $300,000. Is it possible to get a portfolio loan to purchase all 9 properties? Has anyone done this? Is this is a good idea to do this? What do I not know to know if this is worth pursuing?
The pros I see: at $500 average rent per unit x 11 = $5500 per month. Purchase price of $300k. Down payment of 25% over 30 years at 5% = Mortgage = $1562. So 5500-1562 = $3938 net profit per month. Rents can be increased due to below market rents. Half the houses have updates. The rental market is strong in this area.
The cons: multiple capital expenses, multiple people to deal with, difficult to get a loan, half the houses need updates, once rents are increased can cause vacancies.
Brad