Investment property lender question. Is it true that lenders won't lend to me because I own too many rental properties?

Asked by Scottballet, 01824 Thu Jul 26, 2012

I have 8 rental properties. Some garden style condos, a couple of single families, and a townhouse in Cambridge. I have 100% equity in these properties and would like to pull some money out to buy more. I've heard that lenders won't lend to me because I own too many investment properties. Is this true? I have an excellent (high 700's) credit score but I do get 90% my income from my investment properties. Can anyone suggest a lender that would work with me? What would be a conservative guess on a rate I might get?

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Darrell D. D…, Agent, Schertz, TX
Fri Jul 27, 2012
I won't repeat what my colleagues have already said. Just one addition is the rate - this depends on length of loan and non-occupied homes typically have a slightly higher rate than occupied homes. But if you shop around, you should be able to get high 3's to mid 4's. I have 5 properties and I just closed a deal for an investor who has 3 and his rate was 3.65% for a 15 year note. Good Luck.
1 vote
Bobby Woofter, Agent, Boston, MA
Fri Jul 27, 2012
HI Scott,

I would say there should really be no problem getting financing in your situation. There are some annoying benchmarks and limits on conventional residential loans that can get in the way for investors simply because a standard conventional loan is the wrong financial package for your situation.

My suggestion is to get a commercial loan either conventional or portfolio. These lenders are not tied down to the aforementioned regulations. I have a superb loan officer who has been able to locate financing on excellent terms for investors in all types of situations. He finds investor financing for my clients at the rate of 10-15 a year. Please feel free to reach out to me if you have any questions and I am more than happy to put you in touch with my guy.

Bobby Woofter
1 vote
James Gordon…, Agent, Hamilton, OH
Thu Jul 26, 2012
The problem for most investors is not the number of properties but the number of mortgages. You should be fine with pulling cash out as long as you have documentation of the income and can show your bussiness income as reported to the IRS.
1 vote
Great Spaces…, Agent, Dorchester, MA
Thu Jul 26, 2012
Try a mortgage broker like Guaranteed Rate or a smaller private bank. I like Boston Private and Bank of Canton. I just refi'd an investment property with Guaranteed Rate for 4.5% last month.
1 vote
Dominique Wi…, , Clovis, CA
Fri Jul 27, 2012
I believe, like others who answered, that it goes by the number of mortgages you have not the number of properties. You might want to think about getting a business loan instead. I have a program that is no documentation, no collateral from $5,000-$250,000. If there are hurdles of getting conventional finacing this could be a good option for you.

Dominique Wilder
Universal Acceptance
0 votes
Jessie Cuddy, Agent, Dorchester, MA
Thu Jul 26, 2012
Scott, It's not the easiest question to answer off the cuff without a lot more info but if I understand correctly and you do have 100% equity in all your properties you are sitting pretty. My suggestion to you would be to try and strike up a relationship with a local bank. Often they have a better understanding of the local market and if need be may be able to do a portfolio loan. For what it's worth, Meetinghouse Bank in Lower Mills in Dorchester is awesome. Either way, it's worth having a conversation with someone that you do a sitdown with so they can take a look at more of the facts at hand for your situation. Regarding the interest rate, conservatively maybe 5.5%.

Good luck

Jessie Cuddy, Realtor
Boston Bayside Properties
2253a Dorchester Avenue
Dorchester, MA 02124
0 votes
Wen Farina, Agent, Reading, MA
Thu Jul 26, 2012
You should be able to make this happen specially if you have 100% equity in the properties and no mortgages, your DTI should be low too. in what town would you be purchasing the house? there are some towns that may offer specific lending programs for buyers like yourself, and I would also look as mentioned here into smaller lending institutions, credit unions. Let us know how you make out. Good luck
0 votes
Andrew Nazza…, Agent, Everett, MA
Thu Jul 26, 2012
Hi Scott, you have options and should be able to get it done. Like others have said, smaller banks and credit unions are probably your best bet. A few years back US Alliance used the equity I had in a property to purchase a multi fam in East Boston and basically bundled it all into one loan. Good Luck.
0 votes
Scott McCaul…, Other Pro, Portsmouth, NH
Thu Jul 26, 2012
I would be glad to take a look at your situation. Lenders go off of how many mortgages you have on properties, not how many properties you own. I work with a variety of investors(banks) who have great programs for people like you who own multiple properties- even multiple mortgages. My contact info is-

Scott McCauley
Licensed Mortgage Planner
Regency Mortgage Corp
NMLS # 174108
0 votes
Richard Shap…, , Framingham, MA
Thu Jul 26, 2012
The restirction would come from how many financed properties you own. I could see your situation being an issue though. If most of your income is rental income, by refinancing one or more properties, you will actually be decreasing your income. No lender wants to deal with a borrower whose income will be decreasing. Do you have equity in your primary residence? rshapiro At assetmortgage dot net
0 votes
CH Naamad, Agent, Boston, MA
Thu Jul 26, 2012
Please try this guy. He is a miracle worker:
Rich Clayton
Vice President â—Š Senior Mortgage Planner
Direct 617.830.5265 ǁ efax 781.990.0269 ǁ MLO454889
0 votes
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