Another 10+ financed properties post

[Weng L.]

Hi all

I searched in BP and found lots of posts talking about how to get new mortgages after you hit 10+ financed properties. However my question is a little different - After hitting 10th conventional financed property, how to buy 11st+ properties so that if you sell one of the first 10 conventional financed property in the future, you can still get one more property with conventional loan?

Not sure if the question is clear enough. If not, here is an example - let's say if you bought properties #11 to #15 using portfolio loans under your name or LLC (own more than 75% of the LLC), and in the future you sell one of your properties that has conventional loan, you still cannot buy another property with conventional loan because you have 14 financed properties. I read that property financed under corporate or s-corp does not count towards the 10 spots, is this correct? (Is corporate the same as c-corp?)

So is using corporate or s-corp the way to go (the answer to my own question?)? Is it mandatory that the 11st+ mortgages have to be not shown on your credit report? 

Another question is that is it ok to create a new corporate or s-corp each time right before each purchase (like the way we use LLC) for the purpose of risk separation? (If lender uses rental income of subject property as qualification rather than personal income)

[Ben Durwood]

I've run into this issue myself, and I've found that different conventional lenders have different interpretations of the 10 property rule. If you have 9 properties financed by conventional loans and an additional 5 properties financed by a portfolio loan in an LLC that do not show on your credit report, I bet you can find a conventional lender out there that will finance that 10th property. Some will, some won't. Some lenders are more detailed and risk averse and others are more focused on just closing the deal.

I've never heard of someone creating a separate s or c corporation like that, but I'd be curious to hear if others have.