Rental Portfolio Loan | Ultimate Guide to financing Rental Properties

The rental portfolio loan. What's going on everybody. It's Jeff Tripartitan, Jeff, the mortgage pro dudes. I totally found the perfect loan for investors. I've been looking so hard to find it. It does not exist in the retail, uh, mortgage banking world. Uh, you know, the main depository institutions or the main mortgage banks, uh, that you see across the country, only brokers can access this product and I am so happy that I finally found it. And so I wanted to bring a video to you guys about what this loan looks like. It's called a rental portfolio loan, um, or a portfolio loan. And what it does is almost like blanket financing over your properties. And I think that's a sweet deal. Uh, what I want you to do though, before you actually go out and get one of these loans is talk with your tax advisor, because I'm really not sure how it will affect your tax basis going forward. If the financing is on multiple properties versus one property individually, if you can find that information out before you start doing these loans, that would be super helpful for you. Uh, knowing what this looks like going forward, but it's very, very convenient to have one loan on multiple properties. And that way you don't have to like, you know, get the documentation and paperwork to, you know, every single property that you're doing. Um, so I think this is a sweet, sweet loan to be able to do. And I'm so happy to be talking about this today. So if you have, here's the stipulations for this type of a product, there's a rental portfolio loan. If you have five plus rental units, you can get this type of loan. Um, if you've been trying to find a way to finance these properties without having to do something separately, then this is definitely the loan for you. Um, the minimum loan amount that we can do on this is $500,000. Okay. So that is one stipulation. You had to own probably five or more properties in either high cost areas, or you probably have more than five units that you want to do this blanket financing on. The minimum value of each property must be worth at least $50,000. And we can't do this loan for any properties that are located in rural areas. They have to be either urban or suburban, cannot be rural areas. The minimum portfolio size again is five units. So you have to have more than five units to be able to do this investment properties only. Uh, obviously you can't live in any of the units. You can't have any family members that live in any of the units. They have to be purely investment properties, the minimum DSCR on this. This is a DSCR product. So the debt service coverage ratio has to be at least 1.2. That means that the money coming in versus the money going out has to be significant. It has to be greater than 1.2 debt service coverage ratio. Okay. Um, the rate and term refis and cash out refinances only is what this is for. You can't buy somebody else's portfolio with this type of loan. You can only refinance either a rate and term with your portfolio. So if you have a whole bunch of existing loans and you just want to do a rate and term refinance with this, you could do it that way. Or if you need to access some of the equity that you have in some of your different properties, you're basically cross collateralizing all the different properties together into one loan, and you could actually take cash out. And you can go up to usually 70%, um, for, excuse me, 75% LTV loan to value for cash out, and if you're going to do an interest only on one of these loans, which again is a really sweet deal, uh, you can go up to 70% loan to value. Now, as I just mentioned, these have interest only features on it. And again, you guys are savvy investors. You know what you're doing when you have multiple investment properties. We want not necessarily the lowest rate, but we want the lowest payment. So if a fully amortized payment is going to be lower than the interest only, and that's probably the option you're going to choose if you were going to, you know, try to determine whether the interest only is lower and that's going to give you the best cashflow going forward, then use the interest only option. So it's there for you. If you really need to do this. These are for a 30 year fixed, uh, prop or 30 year fixed loans, which is pretty sweet, or you could do a 10 year interest only and then followed by a 20 year amortization after that. So if you're after maximum cashflow, that 10 year interest only option is probably going to be a pretty good option to take a look at 10 years of interest only payments, you could probably generate some pretty significant cashflow in 10 years on your properties with this type of type of product you need as little as six months of reserves. And remember a reserve is just one month worth of principal interest tax and insurance monthly payment. And on this one, it's going to be a little bit larger because you're going to have a lot more properties. Uh, and that minimum loan amount again is $500,000. So you're going to need six months reserves. And again, that's not money that you need to put into a transaction. That's just money that needs to be left over that is used as a risk calculation for lenders. So you can use things like, uh, retirement accounts, 401ks, you can use IRAs, you can use stocks, bonds, you can use checking savings accounts, money market accounts, you know, all those different things that are somewhat liquid can be used as reserves. Okay. The credit score on this still need to have decent credit. It goes down to 680. Okay. So if you have better than 680, you're going to be okay trying to get this portfolio type of product. And, um, just like all, uh, these specialized types of loans. And again, because this one also is a DSCR type of loan. We need to have that DSCR, the rent, the money coming in versus the money going out, this is going to have a prepayment penalty in the States that allow the prepayment penalty for this particular type of product in some States, you're not allowed to have a prepayment penalty, which is okay, but you'll have a higher interest rate going forward with this type of loan, because it's already built into the rate on that instance. If you were going to do this with just a, uh, in a state that does allow prepayment penalties, you know, it can do anywhere from one to five years, the lower the prepayment period, the higher the rate, and then vice versa, the higher the prepayment period, the lower the rate's going to be in the terms of the rate spectrum going forward. So I think this is a sweet product. If you have, uh, lots of properties and you want to put them under one loan, again, check with your tax advisor to make sure that that's appropriate for doing that, but this is a sweet product that you can blanket finance, all of your different properties and going through all those different guidelines. We just mentioned, make sure that they kind of check all those boxes. And, uh, let's get you a rental portfolio loan. I'd love to be the one that helps you out with this. Hopefully I'm becoming the, uh, rental loan specialist here on, on YouTube. And, uh, I'm going to drop my calendar link down below. Please reach out to me. I'd love to chat with you about your, uh, rent rental portfolio loans. See if something we can put together for you. Okay. Thanks so much for watching my channel. Have a great day and I will look forward to chat with you on the next one. See ya.