Real Estate investors in Orange County have had a difficult time over the past few years getting financing on residential rental properties. While properties with 5 units or more are considered to be “commercial” properties, real estate with four units or less are considered “residential” and are underwritten in a different manner. Residential real estate loans on investment properties are making a resurgence, at least with a few southern California portfolio lenders.
Investment Property Loan to $3,000,000
A portfolio lender will lend on real estate based on typically a more “makes sense” type criteria. While these programs are not necessarily “stated income”, portfolio lenders do tend to understand and underwrite more favorably for self employed borrowers and investors. Loan programs for properties up to four units are available up to loan amounts of $3,000,000 to 6% of the properties value. This means an Orange County real estate investor (or LLC) could purchase a property for as much as $4,615,000 and get a $3,000,000 loan.
Business Entities Can Purchase the Property
While a borrower (a person or group of people) do have to guarantee the loan, title to the property can be in a business entity. For example, the property can be purchased in an LLC, Corporation, Partnership, or Trust. Also, borrowers can cross collateralize multiple properties in order to help leverage the loan. A very cool thing about this program is there is no maximum to the number of properties the investor can own. While Fannie Mae will allow an investor to have financing on up to 10 properties, most lenders will not allow more than four financed properties. This is why a good portfolio lender can be beneficial for a serious real estate investor.
Cashout Refinance on Jumbo Investment Property Loan
Cashout refinances on investment properties are a true niche. Especially for those investors who initially purchased a property with cash and now want to free up some of the equity in the property for future investments.
Authored by Tim Storm, an Orange County, CA Jumbo Mortgage Loan Officer – Please contact my office at Alpine Mortgage Planning for more information about an Orange County, CA Jumbo loan. 877-786-4243 x 7.
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877.786.4243 x 7 | tstorm (at) ochomebuyerloans.com