Portfolio/Blanket Financing vs Conventional Loans for BRRRR

[Bryan Pham]

Hello BP,

I am looking to acquire a fairly sizable portfolio this year, I am wondering which strategy has worked well for seasoned investors in the past. I recently got the nod from my lender to do immediate delayed financing on properties where I purchase with cash and refi out before 6 months but after chatting with a few more members on bigger-pockets I am curious if this is the best route. Let's say if I bought 10 houses all cash is it better to use delayed financing on each one individually or should I do a portfolio/blanket loan? Thanks for your feedback and help! 

[Will Gaston]

@Bryan Pham I would ask yourself what your likely exit strategy is going to be on these properties. 

I exclusively use portfolio loans and they have been instrumental to my growth. However, there is definitely a downside to them. My small, local banks require that I keep the LTV the same on the entirety of the portfolio loan when selling off a property. This is a huge deterrent to selling properties because there is usually little cash left to show for it if they don't allow you to take all of the proceeds.

I love portfolio lending for growth but not for disposition.