Easy question for you seasoned pros:
I want to build up a rental property portfolio. I thought I read somewhere that a person is limited to a certain amount of loans but I am not sure. If I want to acquire 1 rental then 2 then 4, 8…would I be able to get loans on all of them?
Is there a limit on how many loans a business entity can have? Or is that simply for personal loans?
Thanks in advance for your responses!
The general rule is set by Fannie Mae and it says that a “person” can only have up to 10 financed properties at one time. However there are many investors that will allow more then that. I know of a few specific ones that allow up to 19 however you can’t have more then 4 at one time with them.
Commercial loans would be different and I am not sure of their requirements.
I hope this helps. 
Correct about the “10” limit for fnma/fhlmc loans. These are the loans that offer the most attractive rates. You are typically limited to 90% for 1-2 units and 80% for 3-4 units. Less if stated income. Many of the lenders will allow you to have only 4 with them but 10 total. So if you need higher ltv financing or have gone over the “10” limit then there are portfolio/alt-a loans offered by those same lenders. These are not subprime loans which are typically reserved for credit challenged borrowers. Alt A tates are slightly higher than conforming loans but still will allow for great cash flow.
There are a handful of lenders that will allow you to own an unlimited amount of properties and have no maximum that they will do themselves.
For AltA products you’ll need a minimum of 620, higher if you need high ltv or reduced documentation.
Great! The sky is the limit!
Thanks for responses!
Conventional markets also have a limit of $2 million aggregate principal across the 10 properties, if I am not mistaken. This can be easliy reached with 3 - 5 properties, depending on your location. The sky really is the limit since there are a ton of Alt-A products out there.
If all else fails can a loan be written to refi all existing properties under one large loan? Is that even an option?
Yes, it is called a blanket mortgage in my area. However, that would be on commercial paper, not residential. It is also slightly more of a hassle if you want to sell off one, and not the others under the same blanket, but it is not that big of a hassle. It certainly would be an option if it fits your investing goals.
I’m mainly looking to hold long term so I can see a strategy like that working for me since I won’t be buying and selling regularly. I can see down the road getting to the point that I have too many loans open and need to pull one to cover all that is open and then continue on pulling new loans for things aquired as time goes by.
Cool. Sounds like it would fit your needs. Just don’t forget that there are plenty of Alt-A lenders out there that require that you have no more than 4 properties with them but they have no limit on how many other mortgages you have outstanding.
There is no limit on how many properties you can purchase. Only how many you can handle!