Best Way To Finance Multiple Rental Units?
I was told by my mortgage broker some time back that there is a limit to how many mortgages I could carry at one time regardless of cash flow, credit rating etc. I think he said it was 7 mortgages. After that he said I would have to lump several properties together under one mortgage. Any suggestions from people who have done this before? My current stategy has been to put this off as long as possible(I'm not sure why) by flipping properties, buying out right, getting a mortage large enough on one property that I can buy another, and so on.
get another mortgage broker. find and use private money.
Use private money? Why? From what I understand private money typically costs more. It's not that I can't get the financing through conventional means. I was just curious from people that have done this if there were any suggestions about ways to cut costs, number or value of propeties that I should lump, possible financial or legal drawbacks, etc.
There is a limit on the number of conforming loans a single investor may hold. I have been told that number is 10.
Some lenders even have limits on the number of loans they will originate for an individual. For example, CountryWide Home Loans will only give the same individual four loans. Ask them for the fifth loan, and you need special approval from a senior company officer. Additionally, CountryWide will refuse to give you a loan when you already have 10 mortgage loans in place even if Countrywide does not hold any of your other mortgages notes.
There are a lot of non-conforming lenders out there. A good mortgage broker should have no trouble finding one for you.
My local savings and loan will originate both conforming and non-conforming loans. Their interest rate on a non-conforming loan product is only one-eighth point higher than the same loan as a conforming product.