Did you know that you can get mortgages for multiple properties? This option can be especially attractive if you want to boost your investment portfolio with commercial or residential buildings.
However, financing these residences proves to be quite the challenge. Since it seems pretty impossible on the surface, most banks will not lend if you want to get a mortgage for more than four properties.
But there are creative ways to get mortgages if you want to invest in more than four residences. All you need to do is to find the best financial product for your investments. From Dallas hard money lenders to a 401(k) retirement plan, there’s always a solution.
Private and Hard Money Lenders
Private lenders, including Dallas hard money lenders, are people or organizations that invest in debt by lending money to real estate investors. They gain profit from the interest payments and other miscellaneous fees from these loans. Unlike regular employees in notable banks, these lenders understand the real estate system and are likely to negotiate with you.
Although every deal is different, you can usually expect a loan term of less than three years and high interest rates compared to traditional mortgages. These lenders are more likely to work with experienced real estate investors and are more interested in property financial performance than credit history.
This type of loan can finance many rental properties with just one mortgage. While traditional mortgages could cost you $100,000 each for ten individual properties, a blanket loan will cover all those properties combined for a loan of $1,000,000.
Blanket loans are relatively common when it comes to financing commercial real estate, but they are now garnering attention from residential real estate investors too. They gravitate towards this type of loan since the lender will consider all of your properties as one.
Solo 401(k) (Self-Employed Business Owners)
This type of retirement plan is perfect for business owners without employees or business owners with a spouse. It follows the same regulations and has the same requirements as other 401(k) plans. You are allowed to make contributions as an employer and employee, allowing you to pay twice until you reach the specified maximum.
If you’re not a self-employed business owner, but you have an IRA or an employee 401(k), you can opt for a self-directed IRA to boost your real estate investing plans. It’s important to note that this option is heavily regulated, and you can’t act as your own leasing agent. Keep track of all related rules and regulations to ensure that you don’t incur tax penalties.
If you want to get a mortgage for more than ten properties, then this investor-friendly loan will work perfectly for you. Compared to traditional mortgages sold by the bank that offered the loan, lenders of portfolio loans keep things in-house. Like Dallas hard money lenders, companies that provide portfolio loans gain income from origination fees and the interest generated by the mortgages.
Finding a lender willing to finance your many properties may seem hard at first, but knowing where to go will benefit you. When you’re about to decide which option to choose, consider what would be best for you and what will help you achieve your investment goals.
At DFW Investor Lending, our company is run by investors and residential real estate appraisers. Our business has the right people to help finance your properties. We have many hard lenders in Texas, including Dallas hard money lenders, as well as Fort Worth, Arlington, Plano, Irving, and Garland. Our company has thousands of appraisals and hundreds of rehab projects, making us qualified to help you with your real estate needs. If you’re interested in what we are offering, contact us today.