Converting Conventional to Portfolio to get around 10 limit

[John Tan]

I am working on converting my conventional loans to portfolio loans to get around the 10 mortgaged property limit.  From what I am reading, it doesn't matter how the loans are financed (ie conventional or portfolio), if conventional lenders find you have 10 or more properties under mortgage, they won't lend you.  However, since my portfolio lender does not report to credit agencies, so if convert the conventional loans to portfolio through them, my credit report won't show I have 10 or more properties under mortgage and I can still get more conventional loans?  I just want to verify if this is correct and if anybody had experience with this?   Also, if I get a Heloc on a free and clear property, does it count as a property under mortgage once I open the credit line or only if I draw on it?

[Jared Rine]

@John Tan...they need to be completely out of your name and financed to the entity in a non-recourse matter (you have no personal liability) and only then they will count as business purpose/commercial and you can get around.  Just because they don't report to credit, doesn't mean it's a get around.  If you're personally liable (even most portfolio lenders have you sign a personal guaranty), then it's counted as a property, even if it's an entity.  I've had clients try to do this and it doesn't work.  If you don't disclose, that's also actually loan fraud and not something I recommend.  It's just the same when lenders ask you if you've opened other debt and you say no, when you really have.  Plus if anyone runs a quick Lexis Nexis, they'll see all of it anyways, if these are recorded liens.