Seller Financing Portfolio - How will it affect Future Convention

[Daniel Dietz]

Hello All,

We are working on a deal of 9 properties with 16 units that the seller is considering doing Seller Financing on. I AM familiar with Seller Financing (I have done 2 so far) but am NOT familiar with Portfolio Loans, OR how they might affect the '4 Conventional Loan Limit'. We will be  talking to a couple local lenders in the next week or so but wanted to get some feed back from all of you hear on BP so we sound intelligent when we go in ;-) We would be doing this as a 3 way partnership, with one of those partners maybe using a SDIRA.

I guess in my mind it breaks down into two parts, one of which is;

• Should we do a separate Seller Financed Note for each property or a Blanket Loan  that covers all of them? 
  • Possible benefits to individual note would be easier payoff, selling, etc... if we wanted to do that. Cons would be (I assume) higher costs due to separate loans.
  • Benefits to a blanket loan would be cost and simplicity of book keeping etc..

The second part would be;

• How would this affect any of us as far as the 'four conventional loan limit' for future purchases? One of the three of us is at the old 'ten loan limit', one is at two, and one has one.
  
  • Is a Blanket Loan even considered in the criteria for Conventional Loans for future rentals? Is so, is it seen as one  loan or 9 loans?
  • Does it matter if one or all three of us sign personal guarantees or not?
  • When we go to refinance when the balloon is due, assuming we go with a Commercial Portfolio Loan, would it make any difference at that point whether they were on separate notes or all under one blanket note?

  Thanks, Dan Dietz