Four Conventional Mortgages - What are my options on future financing

Hi I am a newbie and I just want to say I really appreciate all the great info on this site. I live in the Atlanta area where I own three rental properties. My two most recent purchases have given me a cash flow of one $600 and the other $700 a month. My goal is to purchase a few more to give a nice cash flow to move on to some bigger projects. I have enough equity and cash to purchase one more, but then I am trying figure out what is my next step. I am planning on holding on to them for a few years, so a HML won’t work. There are a few more of the exact properties available which would give me the same type of cash flow. I have read some about portfolio loans, but I don’t know where to get started. I am also interested if anyone has any other options. Thank you.

you can have up to 10 conforming loans, however they will require you to have reserves of 6 months of PITI for all rental properties, and require a 720 mid score,some lenders won’t go over 4, but the rules are 10, so just shop for a different lender


Andy, Thanks. I spoke with a mortgage broker and a big bank and they both told me the limit was four. So that is good news so I will start talking to some other banks.

Look into a commercial loan from a local bank. You can expect to pay a little higher rate and have shorter amortization, but the only limit is what the bank is comfortable with. There also aren’t any rules regarding 6 months of reserves for each of these type loans.

Thank you. Do you need to have a LLC? I have excellant credit and was wondering what they require.

I agree with Justin on using a local bank, my problem is the terms I’ve been quoted, about 1 1/2 points higher rate and only locking in the rate for 2-3 years,scares the heck out of me, I’m really scared of what interest rates might be doing in the next few years,

If you have a property that you might considering selling in the next few years or that is a less expensive property go the commercial route,more expensive properties you are planning on holding you might want to really think about locking in the rates longer

The VAST majority of mortgage conventional mortgage lenders abide by a 4 financed property limit.

Citi Mortgage will do up to 10, though loans 5-10 can only be on singles and duplexes, no 3’s or 4’s.

Flagstar is the same, I believe.

US Bank will go up to 6.

I talked to an S&L in Ohio (Franklin S&L, Cincinnati, OH) that says they have two investors that will go up to 10 on even 4-unit properties. I plan to determine who these investors are and what banks they do business with around the country.

So the poster is right, they’re out there. Citi is a national lender with a 1-800 number you can go through. Their rates/fees weren’t too bad, as I recall.

Good luck, and let us know what you turn up in your area.

find a mortgage broker that deals with investors, there are a lot of lenders that will go to 10, if a mortgage broker doesn’t deal with investors he just has no reason to know who they are

You need someone that knows several lenders that will go to 10 because each have there own ‘overlay’ of requirements and they will need to find one that fits your needs (an overlay is the banks own requirements, d1beard said citi won’t go with tri or fourplexes on loans 5-10, that is a requirement made by citi)

Thanks again for all of the information. Sorry it took so long to get back with an update. I tried about 5 local Georgia banks with out any luck and then I tried the bank across the street from 2 of my properties. They told me they are a very conservative bank, so they made out well over the last few years and they are looking to lend money. They can give me up to 10 loans, but loans 5-10, I will need 6 months reserves for all of my rental properties (mortgage, taxes insurance,HOA). The good news is they will give credit up to 60% of my retirement accounts to use as my reserves. They will go up to a max debt/income ratio of 45% and will give credit for rental income as long as it was on the previous years tax return. So next year I will receive the credit for the rental income I receive from the properties I purchase this year. The rates and closing cost were very resonable and require a 20% down payment. Their minimum mortgage is $15,000, but I would never do a mortgage for such a small amount. The prices of the properties I am looking at continue to drop, so I may start exploring the commercial loan idea because the loan amount would only be around $40,000. I figured I would start off with a mortgage to help build the relationship. I also opened a savings account at the bank.
I just want to thank you again because so many people I asked, bankers, mortgage brokers and real estate agents just don’t have a clue.

The small local bank I borrow from doesn’t want an LLC. They want the borrowers’ personal name on their loans. Sounds like you are on the right track to get more financing.