Financing the Purchase of Multiple Properties at Once

[Brad Jacobson]

Hey Fellow BP Fans,

I've had an opportunity arise in which I may be able to purchase a set of three 4plexes in a bundle.  The seller isn't interested in any sort of wrap or seller finance so I would like to purchase them with a good long-term financing.

What's the most effective way to go about financing the purchase?  I know I can get three separate investment loans, one for each 4plex, but I'm curious if there's a way to wrap up all twelve units in a single portfolio loan or something along that line.

What's the best path forward here?  If I can wrap them up in one loan, what's the advantages and/or disadvantages to doing so?

Thanks in advance,

[Jeff Copeland]

Advantage of three separate conventional loans:

30-year fixed rate.

Disadvantages of three separate conventional loans:

Three sets of closing costs.

Three separate loan underwriting processes that can be derailed or delayed and kill the deal at the last minute. 

The headache and hassle of doing three mortgages at the same time. 

Disadvantages of one commercial loan:

Rates are not fixed for 30 years (more likely to be somewhere between 5 and 10 years). 

Shorter term / not fully amortized. 

Advantages of one commercial loan:

One set of closing costs. 

Much easier underwriting process (they'll be looking more at the property than at your personal finances).

Decent/competitive rates/terms - Rates and terms on the commercial side are still good right now, they just aren't going to be 30-year fixed.