Understanding Mortgages, Conventional, commercial rate.

[Bryn Joynes]

Let me start simple.  

1. We have a home which is paid for.
2. We have a condo with $116,000 balance 5/30 ARM, two years in.
3. Want to start investing in SFH. Plan is up to 10+ properties or $40k- $50K total cash flow which ever is first.

I have spoken to my local bank but still do not understand the requirements.  I think I presented too large a picture and should have started smaller, hopefully this thread will clear up my confusion.

I want to buy as many homes with the lowest rate possible with the longest term, don't we all.  This is where I get tripped up.

I believe that I can buy up to 4 properties with a conventional loan (FNMA) with 15% down over 30 years, but most lenders will require 20% down.  I also presume that some lenders will have their own overlays, or added requirements to loan you the money.  After you have 4 financed properties then it becomes more difficult to find lenders who will lend money, although you can still do FNMA loans but with differ down payments and credit score upto 10 financed properties.  Am I on the right path?

Where my confusion comes in is when does a bank change your rate from a residential rate to a commercial rate.  The bank I spoken to seems to convert to a commercial if a property is bought as a rental, which makes sense.  They also move you to business banking department as soon as you have three or more properties financed with them.   

I know each bank has different requirements, but I'm trying to get a feel for what is the limits of a good relationship with a lender.

So should I buy a house and move in and make it my primary residence, and how long do I need to stay there before I can buy another at a residential rate and move into that one?  Do all banks charge a different rate as soon as it is not a primary residence but a rental?

Thanks for any time you take in answering this group of questions.

Bryn Joynes