I currently have mortgages on my primary residence and one investment MF. My plan is to purchase 10 or more investment props. I am using equity in first MF to put DP on next prop, cash out refi and repeat. How do I get around the new 4 loan limit. LLCs? Blanket com. loans? Any suggestions??? Just trying to have the best game plan for the future. Thanks.
You’ve got a couple good ideas already. Talk to local banks that service their own loans and don’t sell them on the secondary market. We have an LLC and have dealt only with local banks so far. Our current deal is a blanket loan for 4 SFHs. No concern about limits on the number of loans like this. Find out what different banks want for down payments now. A lot of places revised their guidelines with the credit crisis. We were pretty sure we were going to go with one bank that only wanted 10% down. They changed that to 25-30% down recently. We found one that wanted 15%, but were willing to include closing costs so we’re using them. Most, if not all, banks at this point are going to want to see you have some of your own money in each deal. Don’t be surprised if you can’t cash all your money out of the deal after it closes.
thanks justin. I have worked with a broker with my current props for the last 8 years, but he uses banks w/FM guidelines. He recently told me he is working with a local bank (no FM guidelines), but I think I can cut out the middle man (him) and go straight to the bank and pay less points or get better rate. He wisely is not volunteering the name of the bank. The local bank still wants 25% DP (or 20 w/ more points) but will let you have 4 morts. w/ them. I think I will sit down with mortgage people at the local banks and see what happens.
My goal/exit strategy is 10 or more foreclosure MFs, repair, rent, and hold till market peaks again (5-10 years?). I’m thinking that I’ll keep the good ones and dump the weak ones, and roll profits into larger commercial or apartment buildings. I am using the 50% rule (thanks to propertymanager!!) and I am very familiar with the area and the realistic rents I can get. I have done all my homework here on this site and I have found it very informative. Any other thoughts on what I may be missing, or suggestions a gladly welcome. Thanks, Kevin