Future Refinancing Strategy

[Marc Izquierdo]

I've been thinking about the future and when the time comes where I will no longer be able to get a conventional loan from a bank.  The following potential situation leaves me with some questions.

When I can no longer get a conventional loan, I have the options of using hard money, cash, private lending, etc.  However, what is my exit strategy?  I know I can (and would like to) refinance out.  But since I can't get conventional lending, how would I get approved to refinance through a bank?

For example, if I buy a property with hard money (because I cannot get a conventional loan), how can I refinance? My DTI wouldn't have gotten any better. Or is this where the "seasoning" period comes in?

Same thing if I used a private lender, how would the lender get his investment/profits back?

If someone could explain this I would appreciate it.

Thanks!

[Jason Million]

@Marc Izquierdo The 10 conventional loans refers to having ten loans insured thru a GSE - either Fannie Mae or Freddie Mac. Keep in mind, this includes your primary home loan too and also there are additional credit and income requirements for 5+ loans to qualify. Now there are conventional financing options that are non-GSE backed. These will tend to have a little higher rate but they will allow you to amass many more properties and leverage your position. The other option is to dive into commercial financing. The benefit of commercial loans are you run them thru your business (normally with a personal guarantee) there is no personal debt to income used just the properties DSCR and they don't show up on your personal credit either because the loan is in the name of your company.

To me, I believe that if someone is looking to amass a large portfolio commercial financing makes the most sense.  

Hope this helps a little!  Let me know if you have nay other questions!