Launch
- Owner-occupied loans for the home you live in, including 2 to 4 unit homes, used honestly under their occupancy rules
- Savings and found money for down payments
- No adjustable rates on rentals
Level 3
Financing design
The right kind of money for each stage, rules that keep any one loan from sinking the portfolio, and tools to see the whole debt ladder at once.
Money for each stage
Build
- Standard investor loans until the limit on financed properties (ten under the Fannie Mae guide)
- Fixed rates, 30-year terms
- Rehab deals bought with cash, then refinanced
Scale
- Rental-income (DSCR) loans and portfolio loans from local banks
- Seller-financed and assumable loans when terms are good
- Ladder the maturities; read every prepayment and balloon clause before signing
Kill the debt
- Highest rate first
- Recast after large principal payments
- Same-payment refinance only when the break-even is short
Harvest
- No new debt by default
- Cash purchases only
Debt rules
- Fixed rates on long-term holds wherever available.
- No single lender holds more than about a third of the debt once past 20 loans.
- No more than a quarter of the debt matures or balloons in any 12 months.
- Every new loan must pass the stress drill at a rate 2 points higher.
- Blanket loans that tie many houses together are avoided or kept small: one bad house can put the whole group at risk.
- Read recourse (personal guarantee), prepayment penalties and balloon dates on every rental-income loan.
- Reserves are never borrowed against to buy more houses.
Debt ladder
One row per loan. Shows the payoff order, the maturity wall and a 2-point rate shock on adjustable or maturing loans.
| Label | Balance ($) | Rate (%) | Monthly payment ($) | Months to maturity or balloon | Rate type |
|---|
Same-payment refinance break-even
Partner money is a different world
Bringing in passive investors who put up money and expect profits from someone else's work can make the deal a security under the test the SEC uses. That means securities laws, registration or an exemption, and a securities attorney before any conversation with an investor.
Educational only. I am currently not licensed to offer or sell securities. Figures are hypothetical, not guaranteed. The risk is real: you can lose money, including principal, and a loss can change your lifestyle. Not an offer or recommendation.
Sources
- Fannie Mae Selling Guide: Multiple financed properties selling-guide.fanniemae.com
- Freddie Mac: Primary Mortgage Market Survey freddiemac.com
- Bankrate: Investment property and rental-income loan rates bankrate.com
- Investor.gov: Investment contracts and the Howey test investor.gov
The operating system: Levels · Plan builder · Operations · Controls · Financing · Relationships
Hypothetical, not guaranteed. Educational only. Not legal, tax or investment advice. Confirm every rule with a licensed professional in the state where the property is.