Financing for a rental property-commercial or residential

[Dean Boyer]

We have 13 rental properties.  Several that we have paid cash for and 5 that I have used private money to fund.  We have 8 completely paid off and our credit score is very good.  I have a full-time teaching job, own a lawn care business and invest in real estate.  My son has now partnered with me and he makes really good money at his sales job.  It is not like we are a high risk loan.

I am purchasing 2 more single family rentals and decided that I was going to put 20% down and finance the rest through our local small town bank.  They are telling me that I have to get a commercial loan since the houses are not our main residence.  They will only go 20 years and 5.45% interest on a commercial loan.  It seems like on here that most people are getting loans for 30 years and lower interest rate.  What do I need to do differently and is it just our bank or are more people running into this problem?

[Chris Mason]

It's just your specific bank. The 'relationship' generally does not automatically get you a better deal on mortgages. Just like Ford dealerships don't necessarily have the selection of Toyotas that you want, not all banks have the mortgages you want, and most aren't REI friendly at all unless you're a rich dude buying 100 unit apartment buildings.