Wednesday, 09 October 2019 13:56

How to Finance Multiple Rental Properties Like a Pro

How to Finance Multiple Rental Properties

How to Finance Multiple Rental Properties Like a ProWhen it comes to rental property investment, growth is key to success on a large scale as a real estate investor. One of the chief concerns among investors new to real-estate is how to finance multiple rental properties. There are a variety of options available to you as an investor interested in more than one rental property.

Why You Should Finance Multiple Rental Properties

There are plenty of reasons why you should be financing, not one, not nine, but over 10 rental properties at a time.

While you can make a tidy profit as an individual investor on a single rental property, the key to success is growth. Whether you’re on your own or part of a larger real-estate investment group, you can compound profits and drive growth by financing multiple properties.

 

Building Real-Estate Empires Through Diversification

Growing a real-estate empire off of income properties requires strategic diversification. There’s an impressive variety among rental property investments that include the following:

  • Vacation Rental Homes – one of the best income-property investments in terms of ROI
  • Single-family-homes - make for stable investments in rental property, with high-growth common in areas where aspiring homeowners can’t afford housing prices
  • Multifamily Housing – duplexes and apartment buildings bring in enormous returns, especially when the buildings are easy to maintain and in good condition.

With so many ways to invest in rental property the potential for building a truly diversified portfolio is immense. Keep in mind that diversifying your portfolio is one of the surest ways to protect your capital. When one investment falls short of expectations or becomes costly, you can make up the difference with the money still flowing in from your other properties.

Common Hurdles to Financing Multiple Rental Properties

Although the benefits of buying in multiple rental properties simultaneously cannot be argued, there are some potential challenges to financing investments of such scale. For one thing, after your portfolio reaches 10 rental properties, traditional financing methods start to dry up.

Even when you have as little as 3-4 mortgages on your plate, many banks start tightening the purse strings and declining further lines of credit for additional ventures.

As an experienced real estate investor, you aren’t dabbling in it for extra income, you’re building an empire and can’t afford to be restrained by finicky banks. What you need is a direct money lender offering blanket loans. With a blanket loan from a direct money lender, you can fuel the growth of your real-estate empire and finance well-over 10 properties without batting an eye.

Direct Money Lenders and Blanket Loans

Direct money lenders are not held to the same standards as banks, meaning you can get financed much more easily. Known for flexibility, direct money lenders offer the solution to financing multiple rental properties with blanket loans.

When wondering how to finance multiple rental properties, you might think you’d have to apply to finance each property separately. The sheer number of applications involved in this approach can quickly overwhelm investors and is subsequently highly inefficient.

Savvy income-property investors use blanket mortgages to cover the financing of multiple rental properties. With a blanket mortgage, you can incorporate the financing for a multitude of rental properties in one loan.

By centralizing the loans for multiple properties into one, you will have lower payments. Not only will they be significantly lower, but also much easier to keep track of.

30 Year Blanket Loans with Fixed Rates

Experienced investors always look for fixed-rate loans and tend to prefer terms of 30 years. While many well-heeled property investors can easily afford to plunk down the full purchase price of a rental property in cash, these professionals know better.

It is arguably more profitable to finance rental properties even when you can afford to buy them in cash. The reason for this is that you’ll face most disconcerting figures come tax time if you bought your rental properties outright instead of financing them.

Another thing that experienced investors know is that 30-year loans are more advantageous than 15-year loans. The payments on a 30-year loan are much lower than shorter terms like a 15-year loan.

What is Seller Financing?

There is another form of financing that is not as well known, seller financing. However, it has developed a negative association with investors that have exhausted other options. With seller financing, the seller is the lender and may continue to earn money without absorbing insurance costs, property taxes and maintenance costs.

With this scenario, these costs are passed down to the buyer, but there are more risks going with this avenue. If you do not own the home, you would be required to get backing from the lender to engage in this form of financing. You may incur problems with the buyer making payments and does not vacate the property. Foreclosure becomes necessary and comes with headaches and costs. Some other complications may arise with the buyer maintaining the home resulting in costly repairs. Lastly, there can be challenges with taxes.

Buy Multiple Investment Properties with Rental Home Financing

Real-estate investors looking to raise money for multiple rental properties can count on Rental Home Financing for the best deal. The blanket loans offered by Rental Home Financing are perfectly suited for income property investors seeking to build an empire whether you are just beginning or already on your journey.

Have a chat with Rental Home Financing and seize the opportunity to purchase multiple properties.

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