Tag Archive for: multi-units

How to create wealth with a portfolio loan

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How to create wealth with a portfolio loan

Many real estate investors wonder how they can create wealth with a portfolio loan. Investors enter this community with the goal of creating generational wealth. This can be achieved by creating a portfolio of homes, as opposed to just acquiring just a few properties. What do you need to do financially in order to successfully create a portfolio? Let’s take a closer look at how you can create wealth with 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. 

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 in order to create the wealth they need to suceed. 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 to create wealth with a portfolio loan.

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DSCR Loans: 3 Most Common Questions Answered

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DSCR Loans: 3 Most Common Questions Answered

Here at The Cash Flow Company we receive questions daily regarding DSCR loans. Today we are going to focus on the 3 most common questions and give you the answers you need to succeed. 

First, can you use a DSCR loan for a multiplex?

While there are fewer lenders who offer loans for multiplexes, there are still options available to you. DSCR loans do exist for 5 or more units and include commercial properties as well. However, you need to make sure that at least 50% of the property is residential. 

Second, what documents do you need for a DSCR loan?

Unlike traditional loans, DSCR loans are easy to process. The items that you will need for a DSCR loan include a lease agreement, operating agreement, appraisal, expenses, and reserves. To clarify, expenses include taxes, insurance, HOA, and flood insurance. Reserves on the other hand include bank statements, retirement funds, and investments. 

Finally, what happens if the rental doesn’t break even?

Most lenders want the properties to break-even. Breaking even means that your income can cover your expenses. Income is the rent that you are receiving for the property. Expenses included the mortgage, insurance, taxes, HOA, and flood. If you divide the income by the expenses, it should equal 1, which is the break-even point. However some lenders are okay with deals that have a ratio that is less than 1. Lenders understand that sometimes investors just need to get out of a bad loan. In this case, they offer higher rates and lower LTV’s. 

Do you have any questions regarding DSCR loans? Contact us today to find out how a DSCR loan can help you succeed in real estate investing! 

Watch our most recent clip to find out more about DSCR Loans: 3 Most Common Questions Answered.

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DSCR Loans for Multi-Units and Large Portfolios

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Is it possible in 2023 to find good DSCR loans for multi-units or larger portfolios?

If you’re looking for a DSCR loan for a large project such as a multi-unit or large portfolio, you’ve come to the right place.

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

DSCR loans used to be most common for single-family or 1-4 unit properties. Now, 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.

Expanded Loans for Multi-Units

DSCR loans now cover a wider range of properties. It’s fairly easy to find options for 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 DSCR Loan 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.

Loans for 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. 

 

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