Most banks will tell you that four investment, or rental, properties is the maximum amount of properties a borrower can finance. However, that is not 100% true.
There are ways an investor can finance multiple rental properties (more than four). Banks are skeptical of lending to more than four properties. Truthfully, there are some banks that will finance more than four investment properties, but it takes a lot of energy and research to find these banks.
Technically, Fannie Mae guidelines state that investors are able to get loans on up to 10 properties. However, banks will tell you they cannot authorize a fifth mortgage, let alone a sixth or seventh. The reason behind the banks creating their loan stipulation is that beyond four mortgages is just too risky. Even if you find a bank that is willing to work with you through financing over four mortgages most banks will only allow a 70% loan to value ratio and most likely will not allow the borrower to take out any cash when or if they choose to refinance these properties.
So Where Do I Go When The Bank Says No To Financing Multiple Rental Properties?
If the bank has said no or can’t give you the terms you need and you don’t have a substantial amount of cash upfront to purchase the properties, an Arizona Hard Money Loan can open up an avenue of lending you may have not been a part of before.
Arizona Hard Money Loans are short-term loans that many investors use to finance a real estate investment project. There are many advantages in using Arizona Hard Money Loans. The convenience of the loan application process can be a project saver. Applying for a conventional mortgage is time consuming. It can easily take months to close on a loan from a traditional lending institution. After approval hard money is typically funded within 2 weeks. Along with the ease of the loan process—Arizona Hard Money Loans have flexibility. Unlike, banks Arizona Hard Money Lenders are able to use flexibility in their loan terms—meaning there can be some negation of the loan terms. An Arizona Hard Money Lender is one person. That means you are dealing with only one person versus an entire team at a bank.
Arizona Hard Money Lenders have no regulations stating how many mortgages they are allowed to approve to a borrower. As long as the borrower has the collateral they will continue to be approved by an Arizona Hard Money Lender. The collateral is typically the collateral the lender uses to secure the loan. There are some lenders that approve of retirement accounts and personal assets to secure the loan. Again, there is flexibility. Once an investor works with the Arizona Hard Money Lender, and they create a personal relationship, terms can improve—this is based on personal trust.
An Arizona Hard Money Loan allows an investor to continue to grow their portfolio.
Real estate investment is an avenue to wealth. Understanding how Arizona Hard Money Lenders operate and forming a relationship with a lender can change your financial world.
Level 4 Funding LLC
Hard Money Lender
Hard Money Loans
Hard Money Loan
Arizona Tel: (623) 582-4444
Texas Tel: (512) 516-1177
Dennis Dahlberg Broker/RI/CEO
NMLS 1057378 | AZMB 0923961 | MLO 1057378
22601 N 19th Ave Suite 112 | Phoenix | AZ | 85027
111 Congress Ave | Austin | Texas | 78701
About the Author: Dennis has been working in the real estate industry in some capacity for the last 40 years. He purchased his first property when he was just 18 years old. He quickly learned about the amazing investment opportunities provided by trust deed investing and hard money loans. His desire to help others make money in real estate investing led him to specialize in alternative funding for real estate investors who may have trouble getting a traditional bank loan. Dennis is passionate about alternative funding sources and sharing his knowledge with others to help make their dreams come true. Dennis has been married to his wonderful wife for 43 years. They have 2 beautiful daughters and 5 amazing grandchildren. Dennis has been an Arizona resident for the past 40 years.