Tag Archive for: mixed-use property

Create Generational Wealth with a Portfolio Loan

Real estate investors enter into this community with the goal of creating generational wealth. Generational wealth can be achieved by creating a portfolio of homes, as opposed to just acquiring just a few properties. Many investors wonder what needs to happen financially in order to successfully create a portfolio. Success begins by finding the right portfolio loan for your needs. Let’s take a closer look at how you can create generational wealth today by using a portfolio loan!

Changes in lending options. 

Investors who expand from a few properties to a portfolio of properties will need to open the door to other loan products. Those who invest in single family homes or have 1 to 2 units are using traditional loans, conforming loans, bank loans, or single DSCR loans. If you are transitioning to a portfolio loan it is important to take everything into consideration before diving in. 

Conforming loans:

Conforming loans limit investors to 10 properties and have a lot of qualifications that you need to meet. 

Bank loans:

Many people use bank loans when they have a portfolio, however, banks normally write their products for 5, 7, or 10 years. This means that every 5, 7, or 10 years investors have to refinance. Some clients are having to refinance properties every year depending on how their cycle is set up.

Portfolio loan:

A portfolio loan is used for 5 to 100 properties and covers all of the properties in one loan. This umbrella loan can not only help investors who have mixed properties, but it also prevents you from needing multiple loans. Another benefit is that a portfolio loan will provide you the support you need as you expand the number of doors per unit. 

Is a portfolio loan right for you?

Benefits to a portfolio loan:Work smarter not harder! 

  1. All mixed properties are under one blanket
  2. One monthly payment
  3. Some have nonrecourse (Nonrecourse does not require a personal guarantee)
  4. Commercial based
  5. The loan is bases on the income from the properties
  6. Don’t have to pay for underwriting on each property
  7. Typically there is a better rate on a larger loan
  8. Can clear up some slots for you.
  9. Can use another person’s credit score if they are under your LLC 

Cons to a portfolio loan:

  1. Lower LTV
  2. Individual appraisals are needed for each property
  3. Pulling a property out is a hurdle (You won’t be able to sell properties to generate money)

Flexibility of a commercial loan.

A commercial loan can provide the flexibility you need to create generational wealth. One of the biggest benefits is that it provides the opportunity for you to use another person’s credit score as long as they are under your LLC. In doing so, a higher score can not only keep the transaction going, but it can open more doors. Another thing to keep in mind is that commercial loans are primarily based on the cash flow and the property value. This allows you to lock them in when rates are good so that you can use the slots to build up some additional properties on the side.

Create generational wealth.

By using a portfolio loan you are creating a bigger asset. More importantly commercial loans, unlike traditional loans, will not show up on your credit. Another thing to keep in mind is that banks often restrict your growth either by the number of properties or the loan amount. Those who are aggressive and use a portfolio loan have the flexibility they need to create the generational wealth that they want.

Is a portfolio loan right for you?

Real estate investors who have 20 properties or more need to start searching for other lending options. A portfolio loan is an excellent way to put all of your properties under one blanket loan. Is this the right loan for you? Contact us today to find out more about portfolio loans and other ways you can create generational wealth. 

Watch our most recent video to find out how you can  Create Generational Wealth with a Portfolio Loan.


What can DSCR loans do now in 2023 that they couldn’t do last year? 

DSCR loans have been around for a long time. In 2023, the real estate climate has experienced a few changes, and knowing how they relate to DSCR loans can help you get ahead of the game.

Changing Landscape for DSCR Loans

While DSCR loans used to be for single-family or 1-4 unit properties, in 2023 we’re seeing DSCR loans explode into multi-family, blanket loans for larger portfolios, and multi-units. 

With new options available, you need to know what to look for while remembering that all DSCR companies have specific niches. It’s important to find a lender who understands the particulars of your project.

The Power of Shopping Around

While this isn’t new, shopping around is very important in 2023. With a growing number of lenders loosening their requirements, finding a lender that specializes in projects like yours can make a big difference. 

If your project is unique or you’re dissatisfied with the rate you’re offered, reach out to mortgage lenders or brokers who have the power to offer something different. 

Exploring DSCR Loan Possibilities in 2023

As a reminder, DSCR loan requirements are based exclusively on income from the property in question (not personal or business income or taxes).

This has allowed for some exciting new developments in the DSCR loan market:

Expanded Property Types:

DSCR loans now cover a wider range of properties, including large portfolios of more than $50 million, blanket loans for mixed-use properties, and larger multi-family units.

The range of these options provide greater flexibility when shopping around for DSCR lenders and exploring their requirements.

Flexible Requirements:

It’s now possible to find DSCR loan options for first time investors and investors who don’t own a primary residence. 

This opens up DSCR loan opportunities for investors who were previously more limited in their abilities to purchase investment properties.

Rural Properties and Condotels:

If you’re looking to purchase rural properties, condotels, or other vacation rentals by owner (VRBO), you can now find DSCR loans for properties up to 20 acres. 

Funding Considerations for DSCR Loans in 2023

Products change constantly, so it’s always a good idea to talk to professionals in your area, particularly when it comes to how DSCR lenders look at funding, financing limits, and credit:

  • Gift Funding Flexibility: Lenders are trending towards having looser rules around gift money. Previously, it was better to have seasoned money in your account. Now, so long as the money is there for closing and it comes from your account, you’re usually set. That said, if you have any questions about gift funding, talk to your particular lender.
  • Property Ownership Limits: A few lenders are also lifting their limits on how many properties you can finance. Previously, the majority of companies limited investors to 5-10 properties. Now, it’s fairly easy to find lenders without those restrictions.
  • Credit Influence: Although DSCR loans don’t look at your income, they still look at credit. The better the credit score, the better the loan to value ratio. Also, the higher the DSCR calculation (rent ÷ income), the better the terms.
  • Standard Interest Only Options: As always, there are interest only options. Depending on your project and the current market, these aren’t always the most helpful, but they are available. 

How to Find Your DSCR Loan in 2023

With the recent shifts in the 2023 DSCR loan market, you should be able to find a loan option that works for you so long as your project has the potential to draw income. 

We’re more than happy to help you shop around to find the best rates. 

You can visit our website to find great tools like our DSCR calculator or contact us at Info@TheCashFlowCompany.com.

Feel free to check out our YouTube channel for more information about real estate investing in 2023.