All Forum Posts by: Adam Craig

I would first ask if the do investment real estate loans.  If they say yes, then get into the specifics.  I think you'll find getting commercial type (portfolio) loans will be easier than finding someone who will do blanket loans.

You want to be dealing with smaller banks or credit unions. There are more of these around than you might think. You just don't notice them. So do a google search on "bank" and your city, then look for ones with just a handful of branches. Credit unions are another good source. You can also try the FDIC institution directory: https://www2.fdic.gov/IDASP/

This is a searchable database of banks.  Its not the easiest tool to use, but it does work if you spend a little time figuring it out.  You can search for smaller bank, then look at their assets.  For banks, loans are assets.  This site breaks them out by type and one of the types is real estate loans.  So look for banks that show real estate loans in their assets and you've found a bank that makes portfolio loans.  Or, at least has in the past.

Changed your title from "warp" to "blanket".  Wrap means something completely different when discussing loans.

Refinancing these properties into a single blanket loan isn't going to help with getting more conventional loans because you still have 10 mortgaged properties.  You might get away with this:

But if your entity is something like a single member LLC then these 27 mortgaged properties are truly your responsibility. You probably gave personal guarantees when you got them. Failing to disclose them to the lender would be fraudulent. If the entity truly is independent and there is no personal guarantee on these loans, then this should be find. Not an attorney.

There are banks that will do portfolio loans on SFRs.  They may take a little work to find but they're out there.

Oh yea. Gotta call your local banks. And you need to get to the commercial division. If they send you to the residential side, you'll hit a wall because they follow the fannie mae guidelines.

And the bigger banks (bofa, citi, etc) don't do these types of loans. You need to talk to the banks that have one branch or a handful of branches, etc.  They should have a commercial division. If they do, you want to go there and explain your situation.

Tell them you're over the 10 conventional limit and want to do a commercial loan on your next investment property and that you understand it will be under commercial terms - i.e. 5 yr balloon, amortized over 20 or 25, etc. and you're ok with that.

They can even do a commercial loan under your personal name so don't think you need to setup a corporation or anything.

I did a conventional loan recently even though I had 27 properties with mortgages. Its because only 7 were mortgages under my name. The other 20 had mortgages under my corporation name (which might be one reason you would create a corporation entity).

But either way, you should be able to find several banks that will do these types loans. Just need to ask for the right dept and make some calls. I'd say about 1 in 3 are doing these today. When I first began, it was about 1 out of every 20.

And what you'll find is that as you develop relationships with these banks and demonstrate a history of payments and growth, they'll make it that much easier for you to do loans.

I've got several banks that no longer require me to submit full packets when I do loans with them. Bank statements, pay stubs and the house. Thats it. They don't even require me to pay for the appraisal up front. They just order it and add it into the closing costs.

But try to build a relationship with several banks. Because every so often a bank will say these loans are on hold temporarily while their ratios balance out. Basically, they are only allowed to have a certain ratio of their lending go to certain loan types and when they exceed that for sfh loans, they put a kibosh on them until their other lending catches up.

If he does a blanket loan, he would simply put them under a corporation name and that would free those up.

Here's the other thing though? Why do you need to put these in a blanket loan exactly? 

Just start getting your loans from local banks. They will allow you to have over 10 properties.  It will be commercial terms but so what. So will your blanket loan.

So you can either:

1) Blanket your 10 properties. Then buy 10 and get conventional loans and then blanket those again. Rinse and repeat. But you're refinancing these things twice.  And that also means that after your blanket, you have 10 homes on commercial terms and NONE on conventional terms.

2) Leave your current 10 properties in their conventional loans forever. And just keep moving forward with commercial loans on each individual home you buy.

You'll have commercial terms on these homes. But so what? You'll have 10 homes always on conventional loans. And thats all you can have at any one time. You won't have to refi all your homes twice. 

And getting blanket loans is very difficult and typically they require a lot more nonsense (i.e. escrows for taxes, insurance and capex).  Doing the commercial loans with local banks is much easier. Most of them are now doing them again. And they don't require you to escrow anything.

Terms with individual banks for single homes are also far better than what you'll get for a blanket loan too.  

My 2nd most recent loan was for 4.25% for a single family home 5 yr amort over 20. 75% LTV. My last loan was for 5% but amortized over 30 (5 yr balloon). SFH. 75% LTV.

I was recently quoted 6% on a blanket loan . Amort over 30. Blanket of 10. 70% LTV. But they wanted to escrow everything (taxes, insurance, and cap ex). So now they'd be holding a big chunk of my money that I would otherwise get to show to banks as more reserves.

So my recommendation is keep moving forward with single loans with local banks. Leave your conventional ones in place.  I'm at 32 homes - 24 of which are commercial terms.....