Part of growing your real estate investment portfolio is figuring out how to finance your endeavors. It’s essential to know your options and think about what type of properties you want to buy and how many. You might want a different loan or mortgage if you’re buying multiple units in the same property or building. Maybe you want to buy multiple single-family homes, which can then have different requirements. Whatever your case may be, LJC Financial is here to help.
Traditional Bank Loans
There are multiple ways to finance a rental investment property. Traditional ways include taking out a mortgage for this property, similar to a mortgage you would have for a house you’d live in. However, depending on how many rental properties you want to finance, there can be more restrictions and rules, especially if you are looking at loans from a bank.
Typically bank financing of fewer than five properties requires a high credit score, a hefty downpayment for investment properties, a good debt-to-income ratio, and higher interest rates. Banks can also be reluctant to lend more than one mortgage loan per borrower, but there isn’t necessarily a limit to the number of traditional mortgages someone can have.
Blanket Loans and Asset Based Lending
Another loan you can look for to finance your multiple rental properties is a Blanket Mortgage/ loan. This single mortgage covers more than one property and enables investors to purchase multiple properties without securing financing for each property. These types of loans are different than traditional bank loans and can have different requirements that vary from private lender to private lender.
Another form of financing can be asset-based lending. Asset-based lending is a loan or a line of credit secured by collateral. LJC Financing is asset-based rental property lending in Houston, giving you the flexibility needed to close quickly. We can guide you through every step of financing your rental properties.
Best way to finance multiple rental properties
There is no singular best way to finance multiple rental properties because it depends on your needs and what best fits you. Not every investment property
Is it wise to own multiple rental properties?
When building your investment portfolio, it’s good to remember to diversify your investments; rental properties can be a great way to do that. Very few real estate markets are as hot as Texas is, with great schools, low taxes, and vibrant cities.
Owning multiple rental properties can lead to more long-term returns on investments. More rentals mean more properties that can generate more overall net income and appreciate over time. So having multiple rental properties can have a huge return on your investment if done right and financed with the right lender.