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Displaying items by tag: Blanket Loan Financing
What is a Blanket Loan?
For a real estate investor with multiple properties, a blanket mortgage covers all of them under one loan, it is a cost-effective and time-efficient way to reduce the stress of managing multiple loans. This is the "cliff-notes" version for learning about blanket loans. For those who are wanting to dig into details we wrote an extensive article on "All About Blanket Loans".
Investment real estate rental mortgages can be complicated, each new mortgage creates more work. Without a blanket loan, the more you keep adding to your portfolio, you are adding new mortgages for each one; creating a nightmare of paperwork, payments, & accounting challenges.
Simplifying Investment Portfolios
With all the concerns of owning investment property for the real estate investor, like closing costs, the release clause, keeping up with multiple properties but under an individual properties loan, keeping up with all those pieces of real estate under a traditional mortgage with balloon payments and interest rates of a single mortgage for each of the rental properties; makes one wonder how real estate developers or property owner can keep up with any of the home loans at all.
With all the paperwork and multiple monthly payments to mortgage lenders, the home loans have drawn in house flippers instead of long time investors. Then people find out about types of loans called blanket mortgage loans. So let's learn more all about blanket loans.
All About Blanket Loans
A blanket mortgage solves the confusion of multiple loans by placing all properties under one loan with one monthly payment. This is completely simplifying the investment portfolio management process.
With a long-term loan, real estate may be sold without initiating a “sale case”, allowing you to use the proceeds of the sale to buy multiple properties. With Rental Home Financing, you can use a blanket loan for purchase or refinance. For example, if you buy a portfolio of a dozen rental properties, a blanket loan allows you to get a mortgage that covers all ten of them under one mortgage. Simple!
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Introduction: What is a Blanket Loan and What are the advantages of blanket financing?
This is a financial product that offers a wide range of features, including a line of credit. A line of credit can be used to help consolidate rental investment home debt and also for other purposes, such as investing in more property for your LLC.
Many Properties Under 1 Loan
This loan offers many benefits over other loans because it can be used in so many different ways. They are easier to get than most other loans and the interest rate is typically lower than on an unsecured loan.
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Nothing quite compares to how it felt when you closed on your first rental property.
It was a brand-new experience, maybe even one you weren’t sure you’d see all the way through.
But you did and, pretty soon, that investment began paying you back as rent checks coming in every month.
If you’re like most investors, it didn’t take you long to start thinking about going through the process all over again and purchasing another rental property. After that, it probably felt inevitable that you’d soon purchase one more.
At this point, you may be seriously considering turning real estate into the source of your full-time income. You might even be just one or two properties away from replacing your current salary. Then, why not just keep adding more to your portfolio?
This is usually when investors begin asking, “How many mortgages can you have?”
The answer may surprise you.
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Are you an experienced real estate investor who wants to grow their portfolio by more than just a single property? Everything you need to know about a blanket loan is right here. You should know about one of the best lending solutions for that kind of venture.
You came to the right place to increase your investment portfolio.
What Is a Blanket Loan?
When most people think about taking out a loan to purchase a property, they imagine a residential or commercial mortgage. This has been the standard for decades. Now things are different, we can provide a loan for many properties under one loan.
Yet, while this has become the most popular version for buying a property, investors often want to buy more than one at the same time. In these situations, an experienced investor will almost always opt for a blanket loan.
Many Properties Under 1 Loan
With a blanket loan, you can secure numerous properties at once without the same inconvenience and overhead associated with multiple mortgages. Blanket loans offer a number of other unique advantages, as well.
These business-purpose loans can include:
However, they can be used to purchase many, many more. Why not try our quick form and get started today!
Cross-Collateralization Across Investment Properties – and State Lines
Another reason an experienced investor will usually choose a blanket loan is that it allows them to cross-collateralize properties – even across state lines. So, not only is the investor able to finance several properties through one lender, they can also use this arrangement to finance other deals. Look into our Foreign National Investor Financing Program.
A Blanket Loan Can Free Trapped Equity in Your Portfolio Loan
Not so long ago, developers and investors alike depended on leveraging the equity they had in properties to finance further ventures. Unfortunately, this means the investor’s equity has essentially become “trapped” within the property.
A Blanket Loan Can Leverage the Support of an LLC. While the investor’s personal financial history may play a role, as well, it’s usually very helpful to have the backing of an LLC during the consideration phase. This can lead to a much larger blanket loan than they would have otherwise received.
The Release Clause & Closing Costs
The last trait of a blanket loan that we need to talk about is the release clause. This is an essential feature because, without it, these loans would lose a crucial degree of flexibility.
In short, the release clause of a blanket mortgage gives the investor the right to sell off individual properties it covers without selling all of them. Having a way for extra money to throw at closing costs is quite an advantage. Call us today – 1-888-375-7977and speak with one of our qualified representatives
7 Advantages of a Blanket Financing Loans for Term Rentals
Aside from the traits described above, there are a number of other reasons so many investors choose to use a blanket loan for their deals. Individually, most options don’t offer these advantages. However, only a blanket loan offers all of them. Check out our top seven advantages for a blanket loan below.
1. There Is No Limit to the Number of Properties You Can Own
Fannie Mae and Freddie Mac can only offer so much help. Both FNMA and FHMC limit the number of properties they finance to just 10. Once you hit that limit, you’re on your own when it comes to financing. That’s not ideal.
Fortunately, there is absolutely no limit to the number of properties you can pay for using a blanket loan. There is also no limit to the number of properties you can own in order to be eligible to apply for one.
2. Consolidating Your Properties into One Type of Loan
Of course, that’s not the only reason a blanket loan works so well for investors with multiple properties. Even if it wasn’t one of the only sound options available, it would still be one of the most attractive simply because you can consolidate all of the properties you own under a single loan.
You could even use the additional properties to negotiate more favorable terms with a lender. Want to consolidate your properties?APPLY ONLINE NOW
3. Rental Property Financing Streamlined Accounting with Just One Small Business LLC or Business Partnership
If you think taking out multiple loans is going to be inconvenient, wait until you need to maintain the related bookkeeping year after year. Quite the nightmare with many properties. The alternative is 5 or 6 blanket loans with each one covering 10 mortgages. That is much more manageable.
4. Leverage the Equity from Many Properties or Partner Buyouts
The next time you find a great property to invest in, you can pool the equity from your existing properties, cash it out, and use it as a down payment toward the purchase of this new rental home – or rental homes. Got a partner buyout planned? APPLY ONLINE NOW!
5. Greater Borrowing Power with No Debt to Income Ratio
You’ll be able to prove you’ve already been responsible with a large sum. That means you shouldn’t have much trouble securing even more.
This is a huge advantage far too many investors miss out on when they utilize individual loans for their properties.
6. Take Advantage of Your Strong Cash Flows with your Mortgage Loan
When a lender considers you for a blanket loan, they’ll conduct a global cash flow analysis on each of your properties using a Debt-Service Coverage Ratio (DSCR) assessment.
All of this works to your advantage when you bundle properties because those with stronger cash flow will help make up for those that are weaker.
7. Reduced Risk & a Low Interest Rate than Traditional Mortgage from local banks with a Single Mortgage
Although purchasing multiple properties may seem like it does the opposite, recall that a blanket loan involves the benefits of an LLC. Just one of these many benefits is that the LLC protects the investor against liability issues. These issues could otherwise put the investor’s personal finances at risk. Instead, the LLC would take the brunt of any legal recourse.
Reduce your investment risk, APPLY ONLINE NO or Call us today – 1-888-375-7977
Rental Home Financing
Your Residential Blanket Mortgage Lender for money loans!
Our residential blanket mortgage loans are specifically designed for income property owners and investors on a Nationwide basis. Borrowers, brokers, and hard money lenders now have access to an unlimited fund, backed by experienced professionals, that has attractive financing options with no seasoning and reasonable underwriting guidelines.
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Is a blanket mortgage loan just what you need to optimize your rental property portfolio? There are thousands of real estate investors out there with multiple rental properties, who are not yielding the best possible returns. Blanket mortgages could be one of the simplest and most effective options for turning this around.
What is a Blanket Mortgage Loan?
A blanket mortgage loan is a single loan that can be collateralized by multiple properties. For example; instead of applying for and juggling 10 individual loans on 10 single-family homes or apartment buildings, investors can use a single blanket loan to borrow against all of them. It is one set of paperwork, just one loan to service each month, or to consider refinancing or retiring in the future.
There can be many advantages of these loans for optimizing income property portfolios.
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Find Rental Home Loans at Amazing Rates
Rental home loans are always a murkier place, especially for newbies. When it comes to mortgages for rental homes, finding the right deal with affordable interest rates, in the long run, is akin to finding a needle in a haystack.
Your best bet is to be thoroughly prepared before you start down this path.
From an impressive credit score to maintaining the right cash reserves, there's plenty of advice for you.
Here are 6 ultimate ways to make sure you grab the best deal out of the plethora of rental home loans:
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Rental Property Lending with Blanket Loans
A blanket mortgage is a type of rental property lending that allows the purchase of multiple parcels of real estate under the shade of a single mortgage. The finance of all the properties is taken as collateral by the creditor.
During the release clause, the integrity of the mortgage can remain unharmed if one or more real estate parcels within the blanket are sold. For example, if an investor acquired a blanket mortgage to purchase six buildings and sold two of them, he/she would still maintain the blanket mortgage for the remaining four properties. A blanket mortgage is often used by real estate developers to finance the purchase and development of land.
The Benefits of Blanket Mortgages with Rental Property Lending
Blanket mortgages offer a more efficient, cost-effective way for real estate investors to acquire financing. For a real estate investor, the alternative to a blanket mortgage would be to obtain separate mortgages for each property. For instance, if a company were planning to build a subdivision with 30 houses, it would need to take out 30 separate mortgages to finance the purchase and construction of the 30 homes.
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Lending Matrix for Blanket loans of 3 or more rental doors on residential rental property.
| Geography | Nationwide Financing (Except North Dakota, South Dakota, Alaska & Hawaii) | |||||||||
| Loan Purpose | Purchase or Refinance, Cash out | |||||||||
| Loan Amount Range | $300k-$50MM | |||||||||
| Terms | 5 or 10 year fixed rate balloon with up to a 30 year amortization | |||||||||
| MAX LTV | Up to 75% on stabilized lease ready properties (SFR, TH, 2-4 family, Condos) & Multi units (max 20 units) | |||||||||
| Credit Grid | No Bk’s last 2 years and No Foreclosures | |||||||||
| Recourse Options |
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| Non Recourse | 620 Minimum credit score for US Citizens LTV for Non-recourse will be based on overall credit/loan profile Foreign Nationals treated as Non-recourse, OK up to 75% |
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| Minimum DSCR | 1.15% ** Interest only available at 70% LTV and below, 670 score needed | |||||||||
| Minimum Property Value | $50k for 75% LTV, $40k- $49.9k limited to 50% LTV Multi Family $30k per unit | |||||||||
| Prepayment Penalties |
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| Seasoning | After 90 days of ownership we will lend off appraised value <90 days ownership we will lend off cost basis (purchase price + rehab) |
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| Occupancy |
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| Fees | Third party Appraisal Fees collected upfront at deposit to submit RHF charges 1-2% origination and $2500 underwriting fee at close Customary title charges at close No application fees |
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| General UW Tips | Loan is assumable with lender approval, with a fee equal to the >$10k or 1% of the loan amount Monthly payment includes, Taxes, Insurance and Capex Capex- $450 SFR- $350 2-4 Per Unit- $250 for multi units and condos (per year) No income verification- qualifies on the cash flow of the portfolio |
Rental Home Financing Investment Loans
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How Blanket Mortgages Work for Financing Single Family Rental Properties
What are blanket mortgages? When should they be used for financing income investment properties? What features and terms should real estate investors be demanding when shopping for a blanket mortgage loan?
Blanket Mortgages 101:
Blanket mortgages may be a new concept for many residential real estate investors. However, they have been used for decades by builders and developers, and commercial property investors. Blanket mortgages are used for funding more than one piece of property, in one loan, with a single servicer. Imagine if a builder or developer needed to arrange individual lot and home financing for every property in a new subdivision, or condominium building.
It would be a paperwork nightmare, not to mention slow, inefficient, and extremely expensive to the point of being cost prohibitive. Instead they obtain one mortgage loan which is secured by all of the property under a single loan. In the past this has been used as bridge or gap financing for those seeking to expand investment portfolios who may be equity rich, but cash poor. Or for offering increased security for a lender in exchange for better terms.
When to Use a Blanket Mortgage
Blanket mortgages make a lot of sense for today’s rental property investor. There are also many questions that investors are asking. Many income investors have poured much of their liquidity into making acquisitions, own property free and clear, but could use the additional flexibility of more cash on hand.
Those with 5 plus rental properties can use blanket mortgages to refinance, and access captive equity for making property improvements, covering holding costs, or simply taking advantage of low interest rates and leverage while recouping precious cash stores.
Others will want to use these investment property loans for making acquisitions while asset prices are attractive. Some of these buy to rent loans will allow for bulk buying of single family homes, or offer a credit facility for pooling property from different sources.
Whatever the purpose, this is an ideal time to use blanket mortgages for residential property investors.
What to Look for in a Blanket Mortgage Lender:
6 factors to look for when considering a blanket mortgage loan include:A lender experienced at making blanket mortgage loans
- A investor friendly lender who actively wants to fund single family homes
- Non-recourse loans if at all possible
- Corporate or business entity loans and title holding for privacy and reduced liability
- If there are pre-payment penalties, and how much they are
- Longer amortization schedules for lower payments and more flexibility and cash flow
- Clarity on partial release clauses for selling individual units in the future
Call us today – 888-375-7977 and speak with one of our qualified representatives.
Rental Home Financing Investment Loans
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Rental Home Financing
9465 Counselors Way
Suite #200,
Indianapolis, IN 46240
About Rental Home Financing:
Rental Home Financing, as the best mortgage lenders we originate rental home loan products and cash out refinance investment property loans as the best investment property refinance lenders. Commercial blanket loans are available with a commercial purpose to suit your needs.
Also, as DSCR loan specialists, we are currently authorized to make such loans in most all areas of the United States. Specific circumstances will determine whether we have the ability approve/close portfolio rental home loans in your state(s). When you are ready to get a mortgage for rental property, we are ready to serve you.