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I have been told that one can only buy 4 investment properties. Then I heard 4 from one bank, ten total. Then I was told it has been changed. Can someone clarify this? What if I want to buy more? Does anyone in NJ offer portfolio lending? Any insights would be appreciated.
Lenders that will be selling loans of non-owner occupied units will typically have similar guidelines.
Lenders that specialize in providing financing to investors generally start to really scrutinize stuff, charge higher rates and make sense ONLY if your properties generate considerable positive cash flow.
If you have a record of successful management (at least 5 years...) you can approach lenders that have more of a "business banking" mindset. Though these are still mortgage loans, and they are secured, the return the bank is looking for will help them balance out their risk on other business loans.
I am not familiar with NJ but I would suggest looking to the banks that do emphasize that side of their business. Generally these are NOT the banks that have giant towering HQ, but places with the owners actively involved in making these decisions. I know that a lot of such banks have consolidated as of late, and it is NOT the same environment it was a few years ago.
The other thing to consider is that at a certain point you can manage to finance a nearly infinite number of properties if you personally have large cash reserves. Once you own a property free and clear it is (or was...) very sound collateral to not just banks but other investors. You would be surprised how many small business people (everyone from dentists and doctors to car wash owners and mechanics) own their property / place of business outright and are willing to partner with successful rental property owners in acquiring property that may be near their business. They can see the well maintained rentals and realize the risks associated with such investments are something they (up until the recent blow up...) can assess on a daily basis...
It was 10 until last year... then it was 4... now it's 10 again. But you have to have a 720 or better score if you go over 4.
and there are only certain lenders (Flagstar Bank and MetLife Home Loans are two of them) who will finance borrowers with up to 10 financed properties (as opposed to 4).
You will also need heavy reserve requirements (6 months PITI for each property).
Lenders that will be selling loans of non-owner occupied units will typically have similar guidelines.
Lenders that specialize in providing financing to investors generally start to really scrutinize stuff, charge higher rates and make sense ONLY if your properties generate considerable positive cash flow.
If you have a record of successful management (at least 5 years...) you can approach lenders that have more of a "business banking" mindset. Though these are still mortgage loans, and they are secured, the return the bank is looking for will help them balance out their risk on other business loans.
I am not familiar with NJ but I would suggest looking to the banks that do emphasize that side of their business. Generally these are NOT the banks that have giant towering HQ, but places with the owners actively involved in making these decisions. I know that a lot of such banks have consolidated as of late, and it is NOT the same environment it was a few years ago.
The other thing to consider is that at a certain point you can manage to finance a nearly infinite number of properties if you personally have large cash reserves. Once you own a property free and clear it is (or was...) very sound collateral to not just banks but other investors. You would be surprised how many small business people (everyone from dentists and doctors to car wash owners and mechanics) own their property / place of business outright and are willing to partner with successful rental property owners in acquiring property that may be near their business. They can see the well maintained rentals and realize the risks associated with such investments are something they (up until the recent blow up...) can assess on a daily basis...
Years ago as a loan officer worked with a borrower having 25 property's, looking to buy more.
At that time though conventional lenders was a max of 5 property's under one name. What this lady did in Florida was purchase the property's in her name, later financing into her corporation name.
My $00.02
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FHA must be "owner-occupied"
