Portfolio Loans

[Landon Dean]

Portfolio Loans.....I am looking to learn more about them and some real life scenarios people have used.

1.) How does it work compared to a traditional 20% down loan that I have used on my other two properties.

2.) Are smaller local banks best people to approach about these?

3.) Any other information to help me understand everything I can about these type of loans would be great.

Thanks BP friends!

[Chris Field]

Portfolio loans very depending on the bank doing them, since they are in house the banks can more or less make their own rules. 

So you need to talk to a number of different banks to see what they offer, some are ultra conservative others are more investor orientated.  Right now banks are having trouble making money so if they find a good investor they will more or less shove money down your throat.

Typically they are more expensive than traditional residential financing and are in my experience very easy to get once you have a track record. Unlike traditional financing the underwriting is very flexible so closing one is quite simple. 

Also right now they are hot in the rental space so banks are willing to negotiate on the terms a bit. I have gotten rate adjustments pushed back, construction periods increased, and pre payment penalties removed. All by asking. So don't be afraid to negotiate a bit especially once you have a track record.