Reached borrowing limit with my lender

[Trush A.]

Hello Friends, I have been buying foreclosured properties for last couple of years using a local bank in the area. Most of my purchases are sight unseen In class A/B neighborhood and often they are occupied properties and I buy them under my LLC. They offer 5 year note wIth 4.5-5% Interest rate whIch Is not too bad. So far, I bought few properties with their help. They require 30% down payment. Being a small bank, they are not comfortable lending me more than certain amount at this time even if all the properties are positive cash flowing and I contInue to put 30% down. This is going to slow me down significantly. I am looking for ideas and suggestions from more experienced people on this board on how to secure fInancing for future properties. I am not a fan of hard money loan at very high interest rate. Any direction you can provide is greatly appreciated.

[Andrew Postell]

@Trush A. in theory, your DTI should be getting better as you buy rental properties since your rent will offset your mortgages. Also, to receive a Fannie/Freddie type of loan you will have to close in your name with the property also in your name. But most investors just change the deed of the property back to their LLC after closing. I would also recommend to NOT use any large bank. We use smaller banks for many reasons but mainly because they are more flexible even with the same exact Fannie/Freddie loan. There's almost no comparison. Publicly traded banks are completely out. So here's a list of questions I would recommend asking lenders to see if they can do what we need as investors:

Questions for Lenders

1. When do you start using rental income to help me qualify? (the answer needs to be immediately)
2. How long do you need me to be on title to refinance? (this is important if you do need a short term loan to purchase then refinance out - and the answer should be 1 day...very important that it is 1 day on title is all that is needed to refinance)
3. What is my minimum down payment required? (if they only require 15% down on a single family home that is usually a good sign that you are working with a flexible lender)
4. Can I change title to my LLC?
5. Do you sell your mortgages?
6. What is your loan minimum?
7. Can you explain to me what your reserve requirements are?