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Brad Swearingen
  • Wholesaler
  • Wake Forest, NC
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How to do a portfolio loan for multiple less expensive properties

Brad Swearingen
  • Wholesaler
  • Wake Forest, NC
Posted Jul 19 2019, 08:11

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

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