How to Finance Multiple Rental Properties – It’s obvious that buying several rental properties simultaneously will make a very profitable business.
Not to mention if you are planning to quickly expand your investment portfolio.
This approach will help you to develop your investment account, as well as give several revenue sources every month.
The question is why many beginners in real estate investment are unable to do this?
Well, it is because they have no idea on how to finance multiple rental properties simultaneously.
The Best Options on How to Finance Multiple Rental Properties
If you are planning to purchase more than one rental property,
but have no idea how to finance it,
below are the list of the ideal options you can choose, ranging from the conventional to options for the creative investors.
1. Hard Cash Loans
This type of loan is usually arranged in a short-term loan with interest rates and costs that are much higher than the other kind of loans.
Hard cash loans can be used to substitute for a loan of FHA 203k or as quick funding to obtain a specific property from a seller before new permanent loan solutions are created.
2. Blanket Mortgage
It’s a single loan that can be used for more than one property.
One significant benefit of using a blanket mortgage is that only one package of closing costs is charged if all the rental assets are purchased at once.
However, this type of loan also has a downside.
The fees and rates of blanket mortgages can be higher as it is used to compensate the lenders for any risk.
a special release may be needed from the lenders if one of the groups of assets is under the loan.
3. Private Money Lending
A private money loan is a simpler form of a hard cash loan and is usually offered by those who are seeking a long-term return.
It’s because private money lending is not issued by conventional lenders.
Even so, this type of loan can be an ideal way for new investors who are seeking for innovative financing.
4. Portfolio Lender – How to Finance Multiple Rental Properties
A portfolio loan or lender is an institution that has the origin of mortgage credits and retains the debt in the form of a loan portfolio.
The loans are not offered on the other market.
While the interest rate and fee can be higher,
the requirements, as well as terms and conditions of the loan,
can be much easier to be customized based on the investor’s needs.
5. Owner Carryback
Owner carryback or which also known as seller financing, is the ideal option for an asset that is openly and clearly owned.
Both the seller and buyer have the capacity to avoid a pile of paperwork from applying for a loan.
the seller is likely able to perform a 1031 exchange in order to put off the payment tax on capital gains.
Those are the best options you can choose on how to finance multiple rental properties.
This may be a new thing for you, and it seems like an unattainable dream.
However, nothing will stop you from making your dream come true with a bit of innovation and preparation.