Anything up to four units is considered single family. Loans are typed by the underlying security property and underwritten individually. All banks record their loan portfolios in standardized fashion. Single family (1-4 units), multi family (5+ units), commercial real estate (strip center, office bldg etc.).
From my experiences, not exactly. Theoretically, each purchase of a SFH has no bearing on another and there should be no limit to the number of transactions you can do. Some lenders will restrict the number of loans they will do for an individual to 4, 5, or 10. All this means is that you will have to shop different lenders to purchase and hold 3-4 SFH properties per year.
Now, I believe you can take 3-4 separate mortgages and combine them into a single commercial loan, but I have not done this and do not know if it makes sense. I would imagine that commercial rates are higher…
I beleive the interest is generally higher with commercial mortgages. That is exactly why I would like to know if I would be able to finance several properties (SFH’s, deplexes, etc) per year with residential mortgages.
No. Purchasing more than 3-4 residential homes will not force you to use commercial financing. Sounds to me like you may want to shop around for a new broker who understands investment purchases and how to structure them to allow for maximum purchasing power. Hope this helps.
DC, yes to your question. By definition a property with 1-4 units is considered residential single family. Five or more units becomes multi-family. It does not matter if you borrow personally or thru an LLC, the property type and hence loan type remains the same.
Another vote for no to commercial mortgages. Guideline - You get a commercial mortgage for a commercial property or residential 5+units. You get a conventional residential mortgage for residential prop condos, or 1-4 fam. Once you hit 10 conventional mortgages you may have a problem with number 11.