Quote from @Dulce Davis:
I hear that it's hard to find someone in Texas who will do blanket mortgages. Another lender who is also an investor, says its really not allowed in our area but she knows it happens. What are y'alls opinions on blanket mortgages?
I have 5 SFRs so far. Four mortgages have a balance around $90-100K, with values ranging $135-165. One property has no mortgage. I'm wondering if it would be an option in my situation to do a blanket loan for scaling. Or, just keep going as I am, doing delayed lending to cash out after I make repairs and get a tenant in them. Pros vs cons?
Happy to help on the blanket! There are some pros & cons for sure:
Pros: 1 payment versus multiple easier to keep track of, some times higher LTV than individual loans.
cons: there is a “break fee” on most, if you want to sell 1 or refinance 1 property in specific you’ll have to pay this fee to rebalance the blanket loan, typically 1-2% of remaining balance. Rates can be a bit higher as well for the extra underwriting.
Doing delayed purchase is a good option but using majority of the cash to get the project done, which is fine if you’re doing 1 at a time. Makes it very hard to do multiple at a time, you could utilize a wide variety of loan options to scale faster but I wouldn’t recommend going max leverage on them. Fix n flip loans for purchase + reno.
bridge loans for purchase with no reno, do reno out of pocket.
cashout refinance of course upon completion & renting out, to move funds to the next deal.
