Owner Finance? Blanket Loan? DSCR?

[Nathan Harden]

Hi there,

So I am relatively newer to REI. I have recently bought my first 3 SF rentals and now I am looking to expand. I was just came across a rental portfolio that I do not have enough money to pay for with cash. I cannot do conventional lending because I have recently went from a W2 employee to a 1099. I am going after great cash flowing markets to get me started, these properties are all located in C to C+ neighborhoods.

So here is my situation:

I found an off market seller who has 7 units (6/7 are currently rented close to or at market value) bringing in a gross total of $3,820 a month. 3 of the properties are duplexes and 1 is a SF. The seller said that he wants $210k for all of them. He is willing to do owner financing, still in negotiations about terms but I am trying to leave no stone unturned so that I finance this deal the best way possible. No matter if I go owner financing, DSCR or Bridge, I am going to use Private Money for the down payment. The private money is actually from a relative and I am using their Heloc that they do not touch. It is interest only payments for the first 10 years with an ARM.

When I was trying to buy my first rentals a few months ago, I kept running into the problem that all of the DSCR lenders wouldn't lend on these types of properties because the value were too low. My question is, when doing a blanket loan, will a lender look at each individual property value or will they look at the portfolio as a whole to find its value? Just trying to get all options out on the table and make the best informed decision from there.

I appreciate any/all advice!