How to Finance Multiple Rental Properties

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  • I see it’s the same thing in the US as it is in Canada; Lender’s tend to restrict investors on purchasing more than four properties. When I was a mortgage broker, it was difficult to find a solution for clients.

    This is my first time hearing abot a portfolio lender. I am interested to learn more about it!

    • I’ve been doing business with a small town bank that over the 130 years they’ve been in open are regional. Most do business with people they know watched grow up financially , I walk into my branch say I’d like to talk to Keith sometimes he’s with someone but if he’s not calls me right end I show him the CAD on the house or houses I want and give him what I have learned on my research like what I plan to bid and always under market .If they are already rented out what rent will it will get. if I plan on doing some work to it [ I will not be a slum lord ] . and he always says ok I see no problem . I always pay on time and usually 1/4 more than the mortgage . I make about 300.00 for each property on a 15 year mortgage and a 20% down payment I then use the profit of my rentals to buy the next one . and the more properties you have the faster you get the next down payment. I’ve learned that the less expensive home bring the same profit as the nicer homes and in some cases more.

      • Thanks for the comment Ken, Sounds like you have a great bank to work with! Those are great numbers, where are you located?

  • Since we lend off of investments, not deposits like the bank, it allows us to be much more aggressive with with investment properties (5+ Units,retail, office) Our terms generally look like this:
    250k-2.5mm loan amounts
    70% LTV/LTC
    Rates starting 6.99
    25-30 year fully amortizing (NO Balloon)
    650+ FICO

    *NO borrower income verification (tax return, pfs, etc)
    Only need rent roll and tri merge credit report

    http://www.myinstitutionalbanking.com
    [email protected]

  • I was told by a local portfolio lender that their money does not leave the institution except for loans, they do not put depositor money in other banks even overnight. This is what I am looking for as I am convinced the banking system is dangerously unsound and a bank closing collapse is imminent. My credit union puts money in banks for interest, so it may be no safer than one of the big banks.

    Is the above generally true about portfolio lenders and their deposits?

    • I have no idea how they handle their deposits, just the loans.

  • Great read!

    I never got the banking industry, the more you own the less they’ll lend you.

    • Mark Ferguson says:

      I know, they are worried that too much debt is riskier, but if the debt is making money it really isn’t.

  • Great to read this wealth of resources about mortgage. As most say, if you can’t find it elsewhere, it must be here on this site. Thanks!

  • Love your blog!!! Question – So when someone like you has 10 or so mortgages and you want to buy a new house for yourself – owner occupied, can you get a regular 30 year mortgage easily? Thanks!!

    • Mark Ferguson says:

      Hi Becky, I bought a new personal residence two years ago and it was easy getting a loan with my portfolio lender and I also could have gotten a loan with a conventional lender as well. It is a little tougher but doable if you have the income to qualify.

      • Awesome, thanks!!

  • I was able to find good information from youur articles.

  • Increased says:

    I am running into difficulty trying to get my 5th in conventional loan although I have the down payment for another investment property. Any suggestions?
    Increased

  • Increased says:

    Investment portfolio lender is the first time I have heard about such a thing. I am running into difficulty trying to get my 5th in conventional loan although I have the down payment for another investment property. All of the properties I own are less than 6 months old. All of the properties are tenant occupied with a positive cash flow. Will I have to wait 2 years before I can get another traditional loan?
    Increased

    • Mark Ferguson says:

      Depends on the lender!

  • I am running into this problem right now. Not that my bank won’t loan on more than 4, but that they require 70% LTV on the 5th one, whereas it was only 75% on the first 4. That means more out of pocket. But my question is, if I do my next one in the name of my LLC instead of my personal name, would that make a difference?

    • Mark Ferguson says:

      It being in an LLC won’t make a difference, but you may want to look for a different bank.

  • Glad I found this site. Question: What does an investor with 7 plus rental properties with no mortgages in a state like Georgia do to obtain loan from equity? Keep in mind, the values are lower per prop than NY for example. Also, personally held[I know big mistake] My mother’s holdings and I want to bring in positive cash flow, upgrades, etc… Caveat-ID theft victim, so her personal credit score plummeted as a result. Without personal credit being a qualifier, what about combined value and the fact that I will be managing holdings to ensure returns….where does she look?

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