Bank Loans to buy Real Estate?


I currently have 8 mortgages, 6 rental properties, 1 Primary Home,
and 1 Helco. Fico is 736 and good income.

I am finding deals in NC, FL, SC, for $50K to $90K that need little work
and rents for $900 to $1150 a month. No brainer deals you cant even
build new for that much with 25% real Equity now.

I want to buy 3 or 4 and have some cash on hand. Maybe $10K in hand.

Trouble is the banks say I have “More than 4 outstanding loans” and will
not talk to me about giving me any more loans, even though I can show
income from the “Cash Flow Properties”?

I am sure there is someone else in this situation the same is me?

What can I do to move forward here and buy a few of this great deas
to add to my rental property portfolio?

Local banks are going to be your best bet. There is a local bank here in Texas that I send people to that does not care how many properties you have as long as you can put down 20%.

You can also buy multifamily houses and get commercial loans.

To echo Hooch, get the financing and title the properties through your LLC and then just get commercial loans on the properties. shouldnt be any problems with loan limits then.

Jake’s right on with his advice. That’s exactly what we do. We never hear anything about limits to the number of loans we’re allowed to have.

Fannie Mae recently raised the financed property limit to ten, but imposed a pretty rigorous cash reserve requirement for the fifth through tenth acquisiton loan.


Are you positive FNMA raised their financed property limit to 10? Was this very recently?


There may be local lenders willing to part with some dough. Here are two big questions to ask them. 1. Do they sell all their loans to Fannie or Freddie. 2. Are they lending out of state to declining market areas like Florida. If the answer to 1. is yes, try another lender. I also think you’ll run into a challenge with commercial deals for rentals. Especially if it only involves one or two properties. When you start talking to commercial lenders, will you please come back and share their reaction when you tell them the money is for rentals?

Justin, would you mind sharing the name of the lender?

Chris, would you please share the name of the lender?


Dave’s right. They did increase it to 10, it is very recent and they do have strict guidelines for how much cash you always have on hand in order to get each one over 4.

Wallace, I get commercial loans regularly for multifamily rental houses and I use my LOCAL bank. I also am getting these loans on one house at a time and the value of the loans are all well below the 100K. A national bank wouldn’t even talk to me about my little 25-40K commercial loans. All of my local banks want my business.

We used Community Bank until they took a hiatus from investment property loans. We’ve moved over to Great Southern now. We’re getting better lending terms now. Last deal of ours was $20K purchase price and $4K added for repairs. We only put earnest money into the deal and got a check for $4k minus closing costs at the closing table. The next day we started the process to get the electric on and our new central HVAC installed. Before we had to put down 15% of purchase price no matter how good of a deal we found. Now we’re essentially getting 100% financing plus whatever repairs we need. This is what happens when you can find a good local bank and develop a rapport with the loan officer. Our guy has been doing this for well over 30 years, is a long time friend of our Realtor, and gives me preapproval letters and my requested loan amounts at will.

Is there anyone who is doing these in LLC’s? What about a new LLC per property? Will the local banks finnance in a new LLC (no credit) with a personal guarantee?

Yes, new LLC, commercial loan, personal guarantee. Local bank is the best source of loans. Do your personal banking with a local. They then feel obligated to do business with you.

What I described is in our LLC’s name. A new LLC for each property would get very burdensome after you purchase a few places. We only have one LLC so far. Our bank finances all mortgages in the LLC’s name with a personal guarantee from us.

It depends on what level of risk you want to take. I have some friends who have NO LLC"S no corporation or anything. Just own them in their own name. When tiny Tim eats the lead off his Chineese toys and mom blames it on the walls in your house, and gets her free legal aid to sue you for the permanent brain damage this child will have, they just may loose every single thing they’ve got.

I have other friends who have a few LLC’s. They will put 4 or 5 houses in an LLC and then create a new one. That is what I am going to start to do. I was creating a new one for every house but I decided to up the risk a little and put a few in each of my LLC"s along with good insurance. Sure, they can break the corporate type veil that a LLC has and attack your personal assets if you break the law but they would be hard pressed to do so since I DON’T willfully break the law.

And there are others that put that veil between them and their LLC and are willing to loose everything they have worked for in one big swoop if something big happens where they determine that you haven’t broken the law but you were negligent for some reason or another.

So, in my opinion, it really is based on what level of risk you are willing to take, not so much on how burdensome it is. I set up my own LLC’s for the Virginia State Corporation Commissions filing fee of $100 total and it is really easy to do so I don’t feel like it is that much of a burden.

Your state filing fees are relatively cheap compared to some other states. So you’ve got that going for you. What about seperate bank accounts. When you have 40 different properties in 40 different LLCs, are you going to have a drawer full of checkbooks for each of your different bank accounts? What company name would you put on your business cards?

I do the same with LLC and Banks. Pretty simple. Filing fee here is $88 for LLC. I put 3 houses per LLC. My level of risk.

As for keeping is all seperate with checking and accounting it is simple. I just have a 1.5" binder for each LLC with all info in it. Deeds, leases, mortgages, financial statements, and checking. Also, keep all bills in it as well.

I also use quickbooks on line with the free account that lets you track it all. 20 minutes of bookwork once or twice a month per LLC.

Safe and simple.

I have also thought that at some point it might make sense to sell the LLC versus each property. Don’t know about that part yet. Any suggestions?

I have also thought that at some point it might make sense to sell the LLC versus each property. Don’t know about that part yet. Any suggestions?

I never thought about that… Interesting Idea!

Selling an LLC is like selling a partnership, which can get complicated.

Great info guys very much appreciated. I have multiple LLC’s one which I have a property in now that is fixed. I bought with hard money. I want to sell it to another of my LLC’s but not have it on my credit. So the personal gurantee does not show on my credit correct? Also if it is a SFH am I still looking for a comercial loan from a local bank? What about Credit Unions can they do the same things or since they are member managed will it be harder?
Sorry one last question would it be easier to have it rented before I buy in LLC or does that matter to them? TY again in advance

Our personal guarantees do not show on our credit. If you’re buying in the LLC name, you’ll be looking for a commercial loan even if it’s on a SFH. I haven’t seen a credit union willing to do loans like this - at least not in my area. Look for local banks. If you can show something is already producing income, I’m sure that would look favorable for your case, but we’ve bought some with tenants already in place and others were vacant. As long as the numbers make sense, that’s the main thing. You should know approx. what the house would rent for and use that in determining how much you can pay (and borrow) for the property.