It appears like big banks limit up-to 4 mortgages per person. Folks having larger number of rentals, how are they scaling beyond 4 loans/properties? Any insights from people who have done more than 5 or 8 properties?
LLC
Can you pls expand on it? Thx in advance
Limited Liability Company
If you are going to invest in several properties you need to form an LLC or S Corp and hold the titles in the name of your business to protect yourself from lawsuits.
Balloon mortgage may be an option. Another is using HELOCs or SBLOCs.
You will want a portfolio lender, commercial lender beyond that. Please do not take title in your name - these all go to an LLC, and if you’re extra careful, each property goes into its own LLC. Find a good small commercial lender.
Please expand on why not your name?
Somebody slips and falls, breaks leg on the driveway of your rental. Who gets sued? You the owner! If the property is in your name only, ALL your assets savings RSU’s income paycheck are exposed and can be harvested to pay the settlement.
You’ll want each rental in its own LLC to protect from lawsuits. That way, a lawsuit affecting one property will not bring all properties into the suit. Also, you can think of these LLCs as individual entities, you can also consider yourself an entity. You do not want a lawsuit on any entity affecting another.
you can take up to 10 residential loans, thats the limit per fannie mac. i had around 6 of them. beyond that its all commercial loans , there is no limit on that.
About commercial loans.. what’s the typical interest rate delta compared to standard banks? Also, do they ask for higher down payment? Can you throw in some commercial loan lender names? Thanks
little higher and need 20-25% down depending on property. lima one capital.