Number Of Cash Flow Properties With Mortgages
This question is for all the investors with traditional 15 to 30 year fixed mortgages on there cash flow properties, How may rental properties do you hold with Mortgages on them and will the bank limit the number of mortgages on one person before they stop giving you the money to buy more property?
It's different per lender. Some lenders will allow you to have 4 or 5 properties with them, then, it's time to go onto the next lender. As you get more and more, you become a bigger risk and you take a hit on rates but you should still be able to get financing.
[addsig]
It was my understanding that we were limited to 10 conventional loans. Maybe that was just my lender though.
It was my understanding that we were limited to 10 conventional loans. Maybe that was just my lender though.
You're not limited to 10 properties. Though after 5 rates start going up relatively quickly. After 10, most banks say no. But there are some banks out there that will work with than 10. 15 is the most I've ever seen, but even after that, you'd be able to work with hard money lenders. Maybe somebody here knows of banks that will work with more than 15 properties.
A lender I spoke to approved me for 15 loans at up to $100,000 each. Most of their business is real estate investment. I did not use them because their rates were higher, but I was very surprised to learn that I could get 1.5 million dollars in loans!
Kristy W
The other thing to remember is once you are tapped, you can use your spouse with stated income as well, not that all spouses need to be stated income but is another possibility
[addsig]
A conventional loan can be either conforming or non-conforming. I am told that there is a limit on the number of CONFORMING loans that a borrower may have. Conforming loans are those sold to FreddieMac and FannieMae. Fannie and Freddie will not purchase a loan from a lender if the borrower already has ten conforming loans. Therefore, if the conforming loan lender can not sell the loan, the lender will refuse the borrower's application.
Lender's also have a cap on the number of loans they will give a single borrower. CountryWide, for example, will only originate four loans to an individual. After you have gotten four from Countrywide, you have to go to another lender.
There are non-conforming loans in the marketplace, too. These are loans that do not have to meet the strict guidelines (i.e., conform to) set by Fannie and Freddie. Typically these loans are purchased by other investors or held by the lender as a "shelf" or "portfolio" loan. Each lender will have their own limits on the number of non-conforming loans allowed. For example, Washington Mutual has a limit of 20 loans or an aggregate loan balance of $2,000,000 whichever occurs first. My local savings bank has no limit to the number of shelf loans they will give me as long as I meet the underwriting criteria for each loan.
HUD (FHA) has a different rule set -- no more than one insured loan at a time and no more than one loan in a 24 month period. Since FHA loans are reserved to owner occupants, you are only allowed one FHA loan at a time. To get another one, the first one has to be paid off and at least two years must have passed since you got the first loan.