Real Estate Investment Strategies
As a lending professional I will begin by mentioning that real estate investors are deemed high risk by 99% of the lending institutions in this country. It’s probably no surprise to you after the recent recession, therefore the real estate investors’ market is a highly restricted industry. Most of the investors today lean upon their personal credit scores to obtain properties by way of traditional lending methods like your conventional mortgage, but according to federal bank guidelines, Fannie Mae and Freddie Mac, after 4 properties, an investor is no longer eligible for traditional real estate loans. I want to familiarize you aspiring real estate investors of a lending approach that’s available that has no limit on the number of loans per borrower, a blanket mortgage for all of your rental properties.
THE REAL ESTATE INVESTOR ACQUISITION & REFINANCE PROGRAM
This real estate program allows you to bundle anywhere from 5 to 1000 properties into one simple note, and most times without a personal guarantee. When an investor has multiple mortgage installment trade lines, they inflate your debt ratio which reflects negatively on your personal credit. This creates hurdles in the future when trying to acquire additional financing. The program also enables the investor to limit their personal exposure to property related liability claims. It offers non-recourse lending for loans greater than $3,000,000 whereas traditional residential loans are full recourse. Where traditional loans have a due-on-sale requirement, this blanket program allows the investor to sell the equity in the current properties, that serving as collateral for the loan to the investor during the loan term without repaying the loan. And this program does not limit cash out refinancing loans.
The program offers lending up to 80% loan-to-value that maintains a 1.2 debt service coverage ratio and loan sizes from $500,000 – $50,000,000. That, along with carrying five and ten year fixed rate terms and up to 30 year amortization. You can still continue to manage your own properties with the proper experience and background. This is generally a minimum of two years’ property management experience required. I’d like to think if you’re in this wheelhouse, you’ve probably been on the block for longer than two years, but that brings me to another perk, there is no minimum seasoning requirements the investor must meet before applying for the program.
As with anything in business there are a few requirements. The properties must be non-owner occupied as the program targets properties specifically designed for residential rental purposes. Qualified properties included:
â– Single Family Homes
â– 2-4 Family Homes
â– Town Homes
â– Section 8 Housing
â– Multifamily Apartment Buildings
This funding can refinance your existing portfolio or finance the portfolio purchase of rental investments currently under lease. You must have all properties under the ownership of a corporate entity as this is commercial real estate lending and not intended for individual customers. This financial instrument will open up amazing opportunities for the real estate investor looking to expand their current portfolio, increase the profitability of their current assets, simplify the way they do business while growing their real estate portfolio!
For more information about this service, give Statzer Consultingâ„¢ a call and speak with a consultant today – 305.746.1470