What is the best financing method to invest through an LLC?

[Lawrence Cole]

Some banks have separate departments for business and consumer lending. Consumer lending seems to be more accessible for investors who are newer to the game and don't have large portfolios. Additionally, banks may have a limit of 4 or 5 mortgages that can be financed under one SSN at a given time. 

What is the financing workaround for someone who would like to acquire 2-5 properties annually and prefers to develop and maintain a relationship with one banker?

[Jonathan Bombaci]

Hi @Lawrence Cole if your goal is to grow a large portfolio then I recommend trying to develop a relationship with a local lender. Try to find a local credit union or regional bank with a strong commercial lending division. Open up a deposit account with the bank and then start doing you're loans through them. When you become a repeat customer they'll help you navigate the framework of what you need to do. We have over 17 loans with 1 credit union in our area (Jeanne D'Arc in Lowell MA) and due to our balance they need to bring our loans to the credit committee for approval. It ends up just being an extra step in the loan approval process but we are good customers with a healthy deposit relationship. 

I believe our credit union has a $20M cap so eventually we'll need to establish a relationship with another bank but I know Enterprise Bank (larger regional bank in our area) has a $100M cap per borrowing entity. If we outgrow both of them then that is a good problem to have. 

I'd say go ahead and get started worry about hitting a cap later. If you grow your portfolio right there will be plenty of lenders seeking you out to establish a relationship. 

Best,
Jon