Blanket Loans or Portfolio Banks

[Leo F.]

Need advice on my current situation. 1st has anyone had any dealing with a local NYC portfolio bank Maspeth Federal? Has anyone had a dealings or success with 1st Key Lending?

I currently own 10 SFR. 4 of them have mortgages, the rest do not. As we all know, I am now stuck with moving forward with conventional financing on my next purchase/s.

The value of my holdings is well over $3M+, the outstanding debt is under $1M, so I have tons of equity and positive cash flow.

I would love to continue this course of acquiring homes and building my holdings to a significant number.

I am very happy with the investments I have, and realize that If I can triple this, it would provide fantastic income! 

Given the equity I have in my holdings, what would be the best strategy to grow this into something much bigger? 

Thanks,

Leo

[Chris Kennedy]

@Leo F. I'm not up in New York, but your post is timely. I'm in a similar situation myself and have been shopping portfolio lenders. Just met with a small bank here in Fort Lauderdale yesterday and they offered me a couple of solutions. 

The first was the blanket/portfolio loan. Up to 75% LTV, 5-7 year balloon, 4.5-5% interest, 20 year amortization seems about average here these days. The loan would be made against multiple rental properties, which means that as Larry was saying, it is a little more complicated to sell down the road. But it's really quite simple: the bank will write you an official release with pay-off amount for a specific property when you want to sell. So you can still sell a house separately even if it is in the portfolio of properties that the loan is for.

The second option is to give us a line of credit (LOC) based on our current equity and cash flows. Once the approval is given, we can use that line of credit to purchase more rental properties. Any credit we use is interest only for one year, and must be paid off within one year. What the bank will do is refinance any property I purchase with the LOC and turn it into a regular mortgage loan before the year is up. This is great if we find a property that needs some work and requires a "cash" offer and quick close. We can purchase with the LOC, fund the rehab ourselves, and then refi at the new appraised value as soon as the work is complete. This bank will refinance based on a new appraisal at anytime after purchase as long as we can demonstrate that we have made repairs that warrant a higher value.

Hope that helps, keep us posted on anything you discover since I am new to portfolio loans also and looking for all the info I can find!