Can someone help me find a lender who will let me pull equity out of one of my single family residences. We currently have 11 properties with 7 of them having mortgages. I have heard about blanket mortgages and I am interested in finding someone who does them. Can someone help me?
You need to find an investor friendly mortgage broker. Try your local real estate club. This is not someone you will find at Bank of America or Chase.
Hi
The blanket loan that your refering to is a commercial loan. You can get commercial loans that will cover multiple properties, but the critical thing that you must assure is that the loan doesnt show up on your credit report. If it does, then every property covered by that loan will be countable in the residential lenders limits of 4 or 10 financed properties. I know of many investors that will go to 10 financed properties.
Further info. for you is that you can pull cash out of any property if you have 4 financed properties or less, but once you get to 5 financed properties or more, then you are restricted to purchase and rate and term refinances, no cash outs allowed.
One suggestion as an overall strategy would be to get residential financing for all your purchases and refinances, but when you need cash out, convert enough properties to a commercial blanket loan that it gets you below the 4 financed properties limits, that way if you need cash out of one of the 4 properties, then you can still do that.
I would also work to pay off or down your primary residence and then get a line of credit against it. The reason you want to do this is because it would be the cheapest loan to get to buy new houses if you are rolling houses over on a regular basis. You can also get a commercial line of credit, it may be tougher to get in some ways, but just as effective.
Expect a commercial loan to have tougher lending requirements. For example, the debt coverage ratio must be at least 125% and the loan amount will be limited to a max 70% of appraised value. Multiple properties can by cross collateralized under a single blanket loan. Whether the loan will allow you to take any cash out will vary with the lender.