How long should I wait to cross collateralize my first investment, for a second one?

[Rodney Lorenzo]

I closed on my 6 unit MF last November. I'm looking to cross collateralize to buy a second property, but don't know how long I should wait. I'm new and many recommend newbies stay away from such loans, however, I don't mind taking risks. Here's why. If I wait, let's say, 2 years to see how much equity I have, given that all mortgage payments are made on time, I'll find out how much money I can get through this method and how much through a HELOC. The goal is to tie the first property to the second one for 6 to 12 months, in which I'll use this time to make improvements, then refinance and untie them. What do you think? I don't want to keep them tied together forever for obvious reasons. The goal would be to acquire a larger property over 6 units.

[Henry Clark]

I’m not following this discussion.

We never pull money out of deals. I hate money. 

We don’t shop our new loans. We stick with the same bank.  Some of our investments we can get 1% point less with another lender.  We don’t use them.  They are good.

When we buy or build another location. Tell our banker how much. He looks across all our property values and all our loans. Checks our LTV% and says OK. Orders an appraisal for the new property.

We do have loans at two other lenders. In a good LTV% position with them. Can't use that to cross collateralize with other banks. Wish they were all with one bank.

One thing to ask a bank.   What is their Federal Lending Cap limit.  Make sure they are big enough as you grow. 

Love my banker.  I was worried about interest rates going up so decided to refi before we hit our 5 year balloon term on our 20 year term loans.  Had about 2 years left in average.   Didn’t want them maturing during a high interest rate.   Without me asking he moved us to a 7 year balloon period on a 20 year term.  Love having him as part of our TEAM.  Not just another vender.