How to Find a Portfolio Lender Near You

Portfolio Lender
Last Updated on July 26, 2021 by Mark Ferguson

As a real estate investor, I have run into problems buying rental properties because traditional lenders stopped financing me. They said I could not have more than four mortgages and I could not finance fix and flips. Those banks and mortgage companies made it sound as if I had no options. The truth was “their company or bank” would not lend to me, not that no one would lend to me. Once I found a portfolio lender, I was able to finance over 15 rentals and 20 flips at a time with the same bank. The same goes for owner-occupants who want to buy a house that needs work. As real estate agents, we have saved many deals because we convinced a buyer to change to a local bank after the national bank denied their loan.

What are Portfolio lenders?

Portfolio lenders are local banks that lend their own money and do not sell their loans. Most national banks sell their loans on Wall Street and those loans must meet specific guidelines. A portfolio lender can be a great asset because they may be more willing to finance a real estate investor. A portfolio lender will often have fewer requirements than large national banks, which makes it easier for investors to get loans.

Big banks may not finance an investor if they have more than four mortgages, but many local banks might. I have a great portfolio lender who allows me to finance as many properties as I want, as long as I continue to qualify and have enough money in reserves. Having a good portfolio lender is extremely important to my strategy, which depends on buying many properties. I would have a very hard time reaching my goal of purchasing 100 rental properties if I did not have a portfolio lender financing my properties.

Why are portfolio lenders important to investors?

Many banks will not give you another mortgage if you already have four financed properties. There are some banks that will finance between four and ten properties, but they have many restrictions. Those restrictions include a 25 percent down payment, high credit scores, and no cash-out refinance. Very few banks will give you a mortgage if you have ten financed properties or more. Most banks have restrictions on the number of mortgages they will give to one person because they sell their loans to institutional investors who only buy loans that conform to Fannie Mae guidelines.

A portfolio lender lends their own money and they do not sell their loans to institutional investors. Because portfolio lenders do not have to conform to Fannie Mae guidelines, they will lend on more than four and even more than ten mortgages. They also may allow a cash-out refinance and be flexible with many other financing options. My portfolio lender does not require a property to be in livable condition to give me a loan. Some portfolio lenders do not require an appraisal, they may not require as high of a credit score, and they might not be as concerned with debt-to-income ratios.

What type of loans does a portfolio lender offer?

Since a portfolio lender is a local bank that lends their own money, they do not have to meet Fannie Mae lending guidelines, which allows them more flexibility. However, they do not offer all the loan programs that large banks offer. My portfolio lender does not offer a 30-year fixed mortgage. My portfolio lender only offers a 15-year fixed, 5/30 ARM, or 7/30 ARM. To get the lowest interest rate, I use a 5/30 ARM on most of my rental properties. Here is a great article with more information on ARMs. Each portfolio lender has different terms and loan programs. I can put 20 percent down on as many properties as I can qualify for with my portfolio lender. Some local banks require 25 percent down, some will only offer 25 or 20-year amortizations, and some have higher interest rates. If you are looking for a portfolio lender, make sure you shop around to find the best terms.

A portfolio lender will also want you to have all your accounts and money in their bank. This is usually not a big issue for most people since a portfolio lender will have very competitive programs and products that align with the larger national banks. The better the relationship you build with a portfolio lender the better loans you will get.

How can a portfolio lender save real estate deals?

I have sold many houses in my career that were owned by HUD or a bank. They have very specific rules when selling their homes, and not all lenders know those rules. HUD is very clear they will make no repairs on homes and the buyer cannot turn on the water for inspections or an appraisal if the pipes do not hold air pressure. HUD discloses if the pipes hold pressure on their website on every HUD home for sale. We ran into problems all the time with lenders and real estate agents who did not realize they could not turn the water on until the bid was accepted and they were trying to complete an inspection.

Most lenders will not lend on a home if it cannot be verified that the water and other utilities work. When we ran into this problem we saved many deals because we told the buyer about the local lender who did not require the water to be on. The buyer switched lenders, switched loan programs, and was able to buy the home.

The video below talks about how I use portfolio lenders to flip houses.

How to find a portfolio lender

I found my portfolio lender because I am a real estate agent and I heard from other agents that my portfolio lender was the best bank for investors. After I ran into problems with my mortgage broker financing my fifth rental property, I contacted a portfolio lender to see what they could offer. The portfolio lender had the perfect loans for my investment properties. It took me about a week to move all of my accounts over to the new bank so I could easily finance new rentals.

I have since purchased 20 rentals; 16 of them were financed with the same local bank. This local bank has also financed fix and flips for me as well as raw land.

The first way to find a portfolio lender is to ask everyone you know if they know of a portfolio lender. Some people may not know what a portfolio lender is; ask them if they know a lender that likes to loan to investors. Whom can you ask?

  • Real estate agents know many lenders and maybe your best source to find a portfolio lender.
  • Other lenders may be able to refer you to a portfolio lender once they know they cannot give you a loan.
  • Investors in the area will know portfolio lenders; the trick is meeting them. Real estate investor meetings are a great place to meet investors and get local information.
  • Ask your local bank if they are a portfolio lender or what types of investor lending programs they offer.
  • Ask title companies whom local investors use to finance their rental properties.
  • Call your chamber of commerce and ask if they know who the most investor-friendly banks are in town.

Search the internet

The internet is the easiest way to start your search for a portfolio lender. Simply search for a portfolio lender in your state on any web search engine. I have tried this a couple of times for people in different states and I always get results. Once you find a bank that mentions portfolio lending in your state, call and ask what type of investor programs they offer.

Cold calling

If none of the options above is working and you cannot find a portfolio lender, you may have to resort to calling local banks in your area. Call banks that are not national chains and see what type of investor loans they offer. If they do not have what you are looking for, ask if they know which bank might. Keep trying until you have called all the local banks you can find.

Who are the best portfolio lenders?

People always ask me who the best portfolio lenders are. The best lenders I use are local, they do not lend nationally. I am in Colorado and First Bank is awesome, but if you are in another state you are out of luck with them. There are some national lenders that specialize in rental property financing who are not big banks.

See the lenders I recommend: https://investfourmore.com/resources/#financing

What questions should you ask when looking for a portfolio lender?

Many banks do not advertise that they are portfolio lenders and many people working at the bank may not even know what a portfolio lender is. If you call a bank and they say they are not a portfolio lender, do not give up! Ask to talk to a loan officer and ask specific questions about what type of investor programs they offer. Here are some good questions to ask:

  • Do you loan to investors who already have four mortgages?
  • Do you have a commercial loan or a business loan department?
  • Do you sell your loans or keep them in-house?
  • Do you allow investors with four or more mortgages to do a cash-out refinance?
  • What terms and loan programs do you offer investors? ARM, 15-year, 30-year fixed, balloon?
  • What interest rates do you charge and what are the initial costs for your loans?
  • What loan-to-value ratios do you offer investors for a new purchase and a refinance?
  • What are your seasoning requirements for refinances?

How does a portfolio decide who is denied or approved?

When I first went to my portfolio lender I was told that I did not have enough experience and they could not help me. I was obviously frustrated and had was not very impressed with the lender. About a year later someone introduced me to the same lender, but a different loan officer. They were amazing and happy to help me. I could not believe how easy it was to get a loan!

That showed it was not about the lender’s guidelines, but about the relationship and the person helping me. They care about credit scores and incomes, but not as much as many big banks. If you have a good relationship with them you may be able to get some loans done that the big banks cannot do.

Conclusion

Finding a portfolio lender is not easy, but it makes investing a lot easier. My portfolio lender has been awesome financing my rental properties and fix and flips. This should point you in the right direction for finding a portfolio lender in your area. If you have any questions or suggestions please leave a comment and let me know.

60 thoughts on “How to Find a Portfolio Lender Near You”

  3. 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]

  6. Mark,
    I’m starting to acquire more rental property and of course lenders backed by Fannie/Freddie want 75% LTV on multi-units. I don’t inherently have a problem with this but being that I’m in this for the cash flow, I would prefer to have less equity, which increases my cash-on-cash returns, and increases my reserves to weather any storm. Can you give me a portfolio lender referral? Let me know. Thanks, Dave

  7. I’m wondering if you have set up an LLC or an s-corp for liability purposes, and why you chose that form? Curious also about how you’re taxed.

  8. Hi Mark, can i get a portfolio lender referral in the New Jersey/New York Area if you know of any thanks

  9. can you find me a portfolio lender in the san jose bay area or any in san Francisco area of the west coast? one who does not conform with Freddie n fannie?

    THANKS.
    HERMAN DE GUZMAN 408-219-2374

  11. Hi Mark, if Id like to buy 4 properties this year (my first 4) and I am not a US resident – what type of lender do you suggest? I plan to initially focus on turnkey properties with the intention of buying 3-4 a year. I have about 300k cash, but would ideally put in about 25% on each of the 4 80-100k homes (about 100k + cost for fees). Thanks

  12. Hello Mark,
    Isn’t it risky to have all your accounts with one bank? It’s only insured upto $250k per social security number. I suppose as a couple, that adds up to 500k, more than most people have in cash.
    I will shoot you an email regarding your portfolio lender. We’re in CO and have 7 mortgaged properties, but none of the regular lenders lend to LLCs. And only two banks, Wells Fargo and Stearns, will borrow to individuals with more than 4mortgages, 25% down. We always wondered how other real estate investors do it, having their properties in LLCs without paying the entire property off.

  13. Excellent info–very helpful.. I am coming up against the bank limit of 4 mortgages and need away around it to keep buying more.

    Will be following your blog for more tips!

  15. Hopefully this comment section is still active. When you open a portfolio loan, does that mean you have to transfer all your existing mortgages into it? Or can you just start anew?

    Also, how much down payment typically is required?

  16. Great info. Tough to get answers on this stuff. I am a builder and started building rental property with great equity, but I am going on my sixth one now and don’t want to get stuck with all my cash in it. I need to find a portfolio lender in Mass. Please let me know if you know of any. Thanks.

  17. Hi Mark assuming 30% down and 30yr fixed term, what is a good range for portfolio loan rates in your experience? We are looking to purchase with a co borrower in the family. Both of us have more than 10 financed properties

    • first, it might be tough finding a portfolio lender who will do a 30 year fixed. You might find a 25 year fixed or ARM with 30 year amortization. My 5 year arms with 30 year amort are 4.5 percent right now. 30 year fixed could probably be had, but at 6 or 7

  18. Hi Mark,
    Thanks for all the great info! Looks like you’ve really found a helpful resource for your investment practices.
    What state are you located in? Does your portfolio lender only offer loans in your local area? Are you willing to share the name of your portfolio lender?
    Thanks so much!
    Colby

  19. Is a 10% down possible with a Portfolio lender? and can they be reasoned or they have fixed terms?

  20. Thanks for the guide on finding a portfolio lender. Base on this article, I can see the benefit of having a portfolio lender. It is beneficial especially to people who want to own multiple properties. Thanks for a very informational post.

  21. Before you HAD to use a portfolio lender, how did you get your loans? Did you do 30 year fixed?

    For us just starting out, should we start to use ARMs with portfolio lenders or do the 30 year fixed until we are not allowed anymore?

  22. Question: I own 2/3 of two different multifamily properties.

    1.
    Unpaid Principal Balance:$220,981.46
    Original Principal Balance:$284,900.00
    Escrow Balance:$1,694.79
    Length of the Loan (Months):360OriginationDate:02/18/2003
    Maturity Date:03/01/2033Interest Rate (%):7

    2.
    Unpaid Principal Balance:$220,981.46Original Principal Balance:$284,900.00Escrow Balance:$1,694.79Length of the Loan (Months):360Origination Date:02/18/2003Maturity Date:03/01/2033Interest Rate (%):7

    We recently added by father (1/3) owner to the deed in Common. He wants me to refi them with his portfolio lender at 4.5% for 30 more years….
    I am concerned about paying too much interest…. He wants the lower payment which would give us roughly $1,495 more in our pocket each month…
    Is this a good idea? Why? Why not?

    Should i be concerned about him adding them to his portfolio loan? What will that mean for me?
    Thank you!
    Shila

    • I think that is a great idea. Much lower interest rate. You will probably pay less interest and have more money in your pocket. Portfolio lender is just the type of lender.

      • the portfolio is not mine… it’s my father’s. he owns other properties and wants to add the two properties we own together to HiS portfolio to get the better rate…
        how does that effect me?

        if we refi and get the lower rate we get about 1500 more a month.. but at what cost?
        He doesn’t seem to care since he is 73.. and figures he won’t pay it anyway…

        • Figure out the interest you pay in both scenarios, with the rate 3 percent less it will make a huge difference.

  23. Hi
    I am a Canadian and I am looking for a portfolio lender to finance properties in Florida. Can you help me
    Thanks
    Jag

  25. Mark – This is one of the most comprehensive articles that I’ve found on portfolio lenders to date. More importantly, you actually talk about terms and rates which very few people do! THANK YOU for that. I don’t think that the concept of a portfolio loan is tough to grasp, but man finding out what an idea of terms is like looking for a needle in a haystack.

  26. Mark, great article as I’m recently up against my debt to inome ratio with properties. I plan to buy my next home and live in it in a few years but wantd to start planning and researching early. Let me say I appreciate your article and that you seem to genuinely care and answer posts. My question is, I own 2 rentals and live in my third property. In a few years, I plan to rent the current one I live in and purchase a 4th to live in. It seems like the banks will not loan me any more even though my rentals are at worst, break even. Do you know how a portfolio lender would prefer to handle this, i.e. just loan on my 3 rentals or be the debtor on my fourth as well? Thanks in advance.

    • All the banks handle it differently but I bet they would be willing to finance all four.

      • Hi Mark… I have a 14,000 sf commercial office building under contract that currently has a long term lessee for 3,000 sf that makes the property have positive cash flow and remaining 13,000+ of available space that current Owner refuses to lease out while building is for sale, will lease quickly for $18-$24 per yr. adding more than $275,000 in positive yearly cash flow. I am looking for a partner to come in with cash or qualify and buy in to a 60/40 JV with me for $400,000 … Building appraises for more than $1.3M

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