"Buy And Hold" - 10 Property Limitation?
I am being told by several mortgage brokers that no matter what your net worth/credit score/income, once you have more than ten 1st mortgages reporting on your credit report, you cannot get any more conventional loans (IE: Decent Rates).
Truth to this? Work-arounds? I see investors with way more than 10 properties. Are they paying higher rates (commerical prime +)?
JohnCl
They are using a non-conventional mortgage. With good credit/income you should be able to find a lender that will give you terms that are pretty close to conventional. It will likely cost you a point or something, but they are out there. You could always buy or contract I guess...maybe if you have a wife have her start to take the properties in her name?
There is another obstacle in Georgia: You cannot have more than nine rental units. Once you hit the tenth (not properties, but units), you have to post a bond. This only applies if you hold security deposits.
[addsig]
it may cost some, but you can transfer each property in a entity. Esp. if the are commercial 5+ unit building.
Even if he transfers the property the mortgage is still in his name.
What you can do with conventional lenders is to have the account prepare a report that links each loan to the property it is covering.
That was what a bank recently told us to do for a client and they were approved and he already had 10 loans on his credit report
linlin,
Do you know the name of the lender?
JohnCl
There are lenders that will let you have more than 10 but the main thing is that they will want you to have 10% down.
WAMU used to have a program that would work for you but you need to check constantly as there is a hi rate of change in the lending market with programs going and coming all the time.
I am starting to see some that are stated stated again after disappearing for a few months.
[addsig]
StockPro99,
I forgot to mention that theses are rate/term refinances at no more than 80% of value. Varied seasoning (3 months to 2 years). SIVA.
In other words, I have the acquisition & repair money lined up. Just need the takeout loan for longer terms holds.
JohnCl
[ Edited by JohnCl on Date 12/10/2007 ]
matx,
More than 10 properties?
JohnCl
I did a google search and found a ton of hits including:
http://www.thelpa.com/lpa/creditreportingfaq.html
I sent a request to the 3 big credit agencies asking for information on how I could report a person for being late. Lo and behold, the response to me was to send me my credit report on myself. Nothing about how I report someone else. I tried 2 or 3 times to find out how to report this dead beat and never got any answer. One question?? Is The Landlord Protection Agency connected to one of the 3 big agencies or are they their own group