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Real Estate Investors

By Brandt Stohr

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Published: 22Mar2008
Word count: 513
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If you're are a real estate investor or are working with real estate investors, this may be the best news you've heard in years...

Almost every week I get asked this question. I get asked for a "Blanket Loan" that will cover 5 or more residential properties for an investor that wants to consolidate all his properties into one loan.

Until now, my answer has been - it is the White Elephant - doesn't exist. We have been looking for this loan for years. The problem is that it is more than 4 units which makes it commercial, but the properties are all residential, individually deeded which commercial guys can't touch or sell.

This is further complicated by the fact that the investor wants releases which would allow him to sell off a property if he gets a good price and the lender releases that property from the security - which again, no one wants to do.

Now there is a loan for investors for multiple residential properties (5 or more) where the total loan size is between $500,000 and $5,000,000. It can do fractured condos as well!

This allows the seasoned investor who owns 10 rental properties to put all the properties into one loan, which will free him up to start buying more residential properties again since all the existing loans in his name get paid off!

Better yet, it can close it in an LLC - which gives the investor added protection and less personal liability.

Investors can take all their properties into one loan. That frees them up to do more loans at FNMA rates since the properties will be under one loan in an LLC and may not even show on their credit at all.

Now here are the parameters: the investment properties MUST cash flow at 1.2 times. LTV's are 75%. Cash out is available but again, they must cash flow. Releases will be granted after the 3rd year. Credit score is not critical like stated but the credit can't be bad. Tax Returns don't need to show income because qualifying is totally based on property cash flow. This is a full doc deal. Now here is the really good news rates on this blanket loan right now are very good, around 7.125% fixed.

Remember, many Real Estate investors are paying hard money rates of 12 to 14% on some Real Estate deals, simply because they have too many properties. Now they can finance all of the properties on one large loan under an LLC and have their personal credit clean to obtain the best available financing for future purchases.

The other benefit is income, several real estate investors use cash out of their investment properties as their main source of income. This is a great way to go from a tax stand point, because they don't pay tax on borrowed money, however; from a lending stand point they don't show much in the way of income. With this type of loan the income from the properties is what qualifies them for the loan, not their personal income.

For more information on consolidating investor mortgages into a blanket loan click here. Real Estate Investor Loans For information on residential mortgages click here Residential Mortgage

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