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!

[Steve Vaughan]

Quote from @Erik Estrada:

Quote from @Steve Vaughan:

I'd stick with the SF and avoid blanket loans in general.   Hard to get released if you want to sell one down the line.

 There are some that do allow for partial release 

Some do means most don't. I said I avoid them in general.