Do portfolio lenders usually only do bundle loans?

7 Replies

When you try to use a portfolio lender, are they going to want a bundle of loans in order for it to be worth their while? Or can I buy property to property. What I mean is, are they going to say- "We would need you to bundle all of your rentals into one big loan before we will lend on additional properties?" or are they going to say "Sure we can do this property, let us know when you would like to do the next one?" I am using up as much conventional as I can right now. I'm just forward thinking! Thanks a lot!

Portfolio lenders by nature lend on a group of properties usually with at least a half million minimum.They usually require you to form another LLC with them to transfer your properties to

Portfolio lenders can do individual projects for sure. 

So I have to purchase multiple properties and bundle with a portfolio lender? This seems pointless to me. If I can acquire traditional financing on multiple properties then I would have no reason to go through a portfolio lender..? Thanks for the advice!

@Joshua Hollandsworth

A portfolio lender is kinda of a generic term for someone/ entity lending their own money. Many want to lend on large loan amounts and/or multiple properties. If you are looking for someone to lend you money without having to conform to Fannie/Freddie guidelines, you are looking for people or probably banks and credit unions that loan their own money rather than selling the loan. Call small banks and credit unions. I have one credit union that loans their own funds on investment mortgages below $120k. I have a $21k mortgage with them along with my HELOC.

Call around to small banks and credit unions with just one or a few branches.  They are usually your best bet.  

I think it's an over generalization to say that portfolio lenders only consider lending on bundled properties. The unique part about being a portfolio lender is that each organization develops their own lending policy that allows them to specify the type and terms of loans that they lend on.

Your best bet is to call all the community banks in your area, present the deal to them, and see if they're interested. You may even seek out younger lenders at an institution that are looking to build their portfolios because they may be more willing to work on smaller deals. I would also consider looking for the smaller community banks in your area because they are more likely to consider smaller deals. You can find out the size of a bank by searching for their Uniform Bank Performance Report which is filed each quarter. This report shows a banks asset and liability size as well as their financial performance. Look for banks with lower loan to deposit ratios. These institutions have money to lend and may be more willing to consider new relationships and smaller deals.

I work as a commercial lender at a medium sized community bank of approximately $500 million in assets in Lubbock, TX. Let me know if I can help out in any other way.

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