Financing of >4 properties: Ideas how to structure portfolio financing?

Hey guys, I am looking for recommendations.

I have started buying up real estate here in Omaha quite aggressively over the past year. In the last 18 months I have acquired 6 properties including a condo for myself.

A bit of history about what I am doing:
I am getting my financing thru my bank at 70-85% LTV with commercial loans at 20 year amortization with a 5 year balloon payment. My condo that is my primary residence is financed with a HELOC at 70%.

The way I acquire:
Buy the house, all cash - fix it up - stabilize it with a tenant + 1 year lease - flip it to the bank to finance it commercial - season it for at least a year under a commercial loan - flip to secondary market.

Of the 6 properties, 3 have balloon loans, 1 is a HELOC, 2 are owned free and clear. The portfolio is worth around 950k, and I owe the bank 450k. I feel I am very conservative right now with my leverage.

I have seasoned 2 of the rental properties that I intend to be permanent holdings for my portfolio to over the 1 year mark where I can get 80% appraised value that I plan to flip it into a conventional loan thru Fannie, 30 year. I am in the process of doing so and I hope to have that done by March-April.

The problem is that my warpath is still ongoing. I am in talks to acquire 3 more properties right now. One of these is a trophy property and thus that’s another one I will most likely flip out to Fannie if I get it.


  1. Should I flip out my condo into the secondary market since I plan to stay here? Or should I reserve that 4th slot for a larger investment property?
  2. I spoke with my banker and she said only 1 mortgage broker in Omaha finances over 4 rental properties to Fannie/Freddie and he charges a good bit more in interest and fees. (5.5% fixed). Do you guys feel I should take those 6 spots even tho my bank is willing to do 30 year amort. at 5% with 10 year balloons?
  3. What options do I have after I have 10 loans flipped out to the secondary market?

I am generating enough cash from my startup that I am not worried about not being able to make the balloon payments at the present portfolio size. However, the more I grow, I don’t feel comfortable holding every one of my rentals in commercial loans. I am hoping to end this year with 5 more properties at 100-200k each so by year end my finances will go from under leveraged to stretched if I cannot establish a more secure and permanent financing structure.

Recommendations and ideas?

unfortunately your already over your 1-4 limit, unless you are holding the properties in an LLC,if they are all in your name, you are in the 5-10 catagory because you have more than 4 properties with loans against them,believe me, I know, I did the same thing and tried to refinance house 3 and 4 out of hard money, but they figured out there was a house 5 with a hard money loan against it and said I had to follow the 5-10 rules

I was thinking of portfolio loans but I read the market for those got wiped out pretty much in the crash. Any insights into that as a possibility?

the best terms will be with conforming mortgages, where you can lock the rate in at about 4.75 (even 5-10), reserve requirements and credit score requirements are higher than 1-4, but you can get great rates and lock them in for 30 years,any type of portfolio or blanket loan will usually just lock in rates for 5 years, and I understand the rates will be more like 6-7%