Can you get financing for more than 10 rental properties?
By Scott Bialek / October 28, 2017
As I grew my real estate portfolio, I learned that conventional financing (i.e. loan with the lowest interest rates) is not available for investors that have 10 or more financed properties. When I learned about this restriction, I researched different ways to finance more than 10 properties and while some local banks and a few national lenders offered some programs (these programs had higher rates and most lenders only offered adjustable rate mortgages).
I started by working with a local bank and obtained a revolving line of credit backed by the equity in my rental property. This initially sounded like a good option but this eventually turned sourer when the bank increased my rate and when the bank started insisting on new appraisal on every property in my portfolio every 3 years.
I then moved to a completely different strategy where I started having my wife purchase each new rental property. This ended up being the best strategy since I could own 10 properties financed with low rate conventional loans and my wife could own an equal number as well. Since my wife’s income was lower and she could not qualify for a loan, we opted to bring in a partner for each property she bought. We pared my wife’s income with a family member who had more income and they bought the next set of properties. This allowed us to purchase more than 10 properties with low rate conventional 30 year fixed rate loans. I realize this approach will not work for everyone but it is a great way to own up to 20 financed properties with conventional mortgages.
Over the years, I met many real estate investor who we ask the same question “Can I finance more than 10 rental properties.” Since this issue comes up frequently, I have continued to look for creative ways to address this issue for our clients. We have come up with several different ways to address this issue:
- Have Your Spouse Purchase the 11th thru 20th Property: Each spouse can purchase up to 10 financed properties (but the other spouse can not be listed on the loan)
- Loans for Investors with 10+ Financed Properties: We have a loan program for customers with 10 or more financed properties. We offer either 5 year Adjustable Rate Loans and even 30 year fixed rate loans. There is no restriction on the number of rental properties that you can own with our program.
- Portfolio Loan (for 7 or more properties): With this program we provide a single loan that allows you to roll 7 or more properties into a single new loan.
- Real Estate Investor Line of Credit: With this program you and use the equity in your current portfolio to purchase your next property. This is an ideal way to take down a property with cash and then convert the loan into more traditional long term fixed rate financing.
In addition to being one of the founder of Hurst Lending, I am also a real estate investor. I have portfolio of residential, apartments, and retail property. I love helping investors build their portfolio and am happy to help to provide advice and suggestions on how to make money investing in real estate that go well beyond what a typical lender can provide. My philosophy is to take advantage of the current low interest rate environment to build a portfolio of high quality real estate that will pay off over the long term.
Please feel free to contact me directly if I can help provide a loan for your next purchase, refinance, or if you just want advice on how to get started or expand you real estate investing activities.
Scott E. Bialek
*Please note that this article is not intended to provide legal advice. You should contact your own attorney to understand the legal protections that are available to you when you purchase real estate.