Investment Property Loans for People with Good Credit

[Kyle Varner]

I am looking at my options for financing some properties, and I'm a little bit lost. I've got five conforming loans, a high income W-2 job and spotless credit. Theoretically, I could qualify for five more loans. I've got five additional properties in vary stages of the BRRRR process, and my cash for picking up additional properties is going to run low soon, so I will need to figure out my next step. The idea of putting my acquisitions on pause to allow for the seasoning period in order to get these five properties into conforming loans isn't very attractive, because in effect it means skipping out on five other deals.

I figure I've got two options:

1)  Get a blanket loan on these five.  This is a viable option, and I see a lot of advertising out there for blanket loans that emphasizes things like low documentation requirements, low personal credit requirements etc.  If I go this route, I'd rather go with a lender with high requirements and get better rates and terms--but I'm a little lost as to the right way to shop around.  Before talking rates and terms, people want me to apply, and I'd rather shop first, choose one and then apply.  Anybody have thoughts?

2)  I could also use some other properties that I own free and clear as collateral for some type of line of credit--I know this is a thing, but again, I'm a little lost about how to shop around to get the best rates and terms.  My Chase Private Client banker mentioned that this could be done through their commercial arm, and I suspect I'd get decent terms from them, but I'd rather compare and contrast a few options.

Anybody have thoughts on these options?  Another option is to use hard money loans for additional acquisitions, but that seems like a high cost way of doing things, and would certainly necessitate being very ready with a lender for blanket loans.

I've got really good deal flow...for the first time!  Now, how do I take maximum advantage?

[Craig Yarnell]

@Jordan Jacks  can assist with start to finish commercial funding solution, using acquisition and value-add short term bridge that can mature into long-term rental debt. 

[Account Closed]

Blanket loan on commercial lending would be your option either now or future. You will not be happy about the rates/terms because they are "much" higher than conforming loans. But once your business shift to another level, your vision also shifts. :). Current commercial loan rates for residential investment property is around 5-6% with 1-3 points, and prepayment penalty within the first 5 years. Lenders want you to apply first because it requires a decent amount of due-diligence to give you a quote. All the properties must be in good cash flow, move-in condition, etc. I don't know how much information you are willing to provide to shop around. It needs much more when you shop for a single property. Hope this helps you.

[Jared Rine]

@Kyle Varner...agree with some of Wenda's posting.  You're going to pay higher than normal rates because of the less stringent requirements when it comes to these loans.  What I might do if I were you is call a few local banks and CU's and see if they would be willing to help.  Sometimes this is the best strategy and you might be able to find an investor friendly bank/CU who can adapt to your business model/plan.  

Being out there in the markets, I think you're going to be hard pressed to find a good line of credit. If you can get one from Chase, I probably would not shop it around.  Those types of products have disappeared from the market (A lot) once 'covid' happened, and have not really returned.  If you need help, I'd be interested to see where you're at with things. To give you a more accurate read on the situation, there would need to be more details shared.