500K minimum blanket loan is killing me.

[Adam Craig]

I am an investor in the Cleveland market (suburbrs). I own 7 rental properties all with 50-65K purchase price. I am coming up on my 10 mortgage max so I have been contacting lenders that can blanket these mortgages.

The problem is that they all have 500K minimum loans -  Right now I am around 300K. Are there lenders for these types of loans that will go below 500K?

[Mike H.]

If he does a blanket loan, he would simply put them under a corporation name and that would free those up.

Here's the other thing though? Why do you need to put these in a blanket loan exactly? 

Just start getting your loans from local banks. They will allow you to have over 10 properties.  It will be commercial terms but so what. So will your blanket loan.

So you can either:

1) Blanket your 10 properties. Then buy 10 and get conventional loans and then blanket those again. Rinse and repeat. But you're refinancing these things twice.  And that also means that after your blanket, you have 10 homes on commercial terms and NONE on conventional terms.

2) Leave your current 10 properties in their conventional loans forever. And just keep moving forward with commercial loans on each individual home you buy.

You'll have commercial terms on these homes. But so what? You'll have 10 homes always on conventional loans. And thats all you can have at any one time. You won't have to refi all your homes twice. 

And getting blanket loans is very difficult and typically they require a lot more nonsense (i.e. escrows for taxes, insurance and capex).  Doing the commercial loans with local banks is much easier. Most of them are now doing them again. And they don't require you to escrow anything.

Terms with individual banks for single homes are also far better than what you'll get for a blanket loan too.  

My 2nd most recent loan was for 4.25% for a single family home 5 yr amort over 20. 75% LTV. My last loan was for 5% but amortized over 30 (5 yr balloon). SFH. 75% LTV.

I was recently quoted 6% on a blanket loan . Amort over 30. Blanket of 10. 70% LTV. But they wanted to escrow everything (taxes, insurance, and cap ex). So now they'd be holding a big chunk of my money that I would otherwise get to show to banks as more reserves.

So my recommendation is keep moving forward with single loans with local banks. Leave your conventional ones in place.  I'm at 32 homes - 24 of which are commercial terms.....