Investment lending

[Marwan Marzagao]

I am looking to buy  a six unit and sixteen unit complex.   I am under contract for the six unit, and the sixteen unit just popped up on my radar this week.  Has anyone ever been in a situation like this.  Were you able to both properties under one loan, if so how did you delay one deal to bring the other one online.  Are lenders able to do this?

[Bill Gulley]

Welcome to BP!

Your best approach is simply to let the first deal continue as it is and contract separately for the second and treat that as a separate transaction.

You can't really delay the first deal without the seller's agreement.

Now, I don't know you or your position financially, but you can very well screw up your first deal jumping on another contract unless you actually qualify for both and you won't be hiding the second deal from the first lender, if you tried that could be a much bigger issue.

I assume the investing level of sophistication by the questions asked. Yes, such loans, blanket mortgages, can be made on purchases, but generally such will be made to more sophisticated investors with management experience and capital. That kind of management experience includes knowing financing options, leverage, loan to value requirements which is missing by posing the question, so, it's not just about getting a loan from a money angle, in commercial lending, management is an important underwriting aspect.

Best thing to do is go talk to your lender ASAP and ask if they can swing another deal you found.

Also, blanket mortgages have several drawbacks for a borrower since 2 properties are encumbered you lock up the equity of both properties, you may not be able to get a second in the future and you have limitations if you decide to sell one property. Separate is usually better, especially starting out. :)