Portfolio Lending Experience

[Zach Taylor]

Have you fellow investors in southeast Wisconsin seen much portfolio lending going on locally? I'll soon need to move into the space of non-QM & DSCR-based financing, and I'm curious if others are looking locally, or at lenders out of state, or nationally.

I'd like to hear of anyone's experience with this underwriting process. Things to be aware of, prepared for, etc.? How does it compare to deals you've completed with conventional?

Thanks in advance.

[Mike Klarman]

We lended on a 9 property portfolio loan about 6 months ago.  They put me on it because I had most experience processing and interfacing with the borrower.

It can be a nightmare process.  Your talking leases, rent receipts, and payoff figures for all properties involved.  Each place needs HOI as well, but you need to figure out which part of the loan amount each property represents.

I made some nice money on the deal as the portfolio was worth about 2 million, but it took 60 days to close and I had three or four email chains going with various people like property managers, insurance agents and title.

Just make sure you are not selling any of the properties.  To break up the portfolio will cost you a penalty of about 20% of the sale price.