Real estate investors who have just a few properties in their portfolio may not be aware the conventional lending guidelines limit the number of financed properties an individual may own to 10. Some lenders take it upon themselves to lower that limit even further. Yet for those who rarely buy and hold butMultiple Lending Options flip, there are no limits. The only limit may be the ability to qualify and how many outstanding loans there currently are.

 Short term, portfolio loans are primarily funded by banks. Banks have the ability to monitor the progress of a major renovation with regular inspections and funds issued in phases. Private lenders have the same ability to fund and monitor. A traditional mortgage banker whose sole function is to approve and fund permanent mortgages are not set up to act as a construction lender.

A bank can issue a short term loan and can also fund a permanent mortgage. You can get both types of loans under the same roof. Yet while a retail bank will have competitive construction loans they may not always have the best rates on permanent mortgages. Banks who issue mortgages primarily do so with their internal client base, those that currently have checking or savings accounts with them. Their clients are a captive audience.

This means you should explore relationships with both types of lenders. A bank or private lender for construction or renovation and a mortgage banker for long term holds. Don’t assume that just because your bank offers both types of loans you’ll get some sort of quantity discount. Banks aren’t big fans of long term debt, especially if future interest rates are expected to rise. And when they do make a mortgage it’s most often sold within days.

If you currently get both types of financing from your retail bank or private lender, do yourself a favor and shop around for your permanent financing. There’s nothing wrong with some friendly competition.