Do Lenders Prefer a Borrower Has Real Estate Portfolio When Lending On Real Estate?

[William Coet]

If a multifamily owner sells a portfolio and then owns only a personal residence, but has cash from sale, will they be a less desirable borrower to lenders?  In other words, does owning an unencumbered cash-flowing RE portfolio make the borrower more desirable to lenders, or is cash on hand all that matters?

Owner doesn't want to put themselves into a less desirable borrower position for future acquisitions...

Thanks!

[Jamie Jones]

Like others have stated, it really comes to what kind of financing you are looking for. In many cases, it may actually be a more streamlined process when obtaining financing if you are getting a conventional mortgage. If you are getting some form of commercial or portfolio loan, then it will really be lender specific. Most depository banks would rather have their clients have liquid assets compared to real estate, which they deem as illiquid, with the hopes that they can eventually get those deposits/investments under their own management. I work for a bank and we would be way more likely to make an exception to a borrower who has $1m+ in liquid assets compared to someone with $5m+ in RE holdings. Hope that helps!