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Multiple Properties, One Loan: Portfolio Loans Unveiled – Uncover secrets to maximizing your real estate investment returns with portfolio lending. Join industry veterans Brett (Stamps Real Estate) and Frank Torres (Convoy Home Loans) as they delve into the world of portfolio financing, unveiling expert strategies, actionable insights, and valuable market trends. Elevate your investment game and build a thriving real estate portfolio – listen now!
Brett
0:00:43 – We’re with the Stamps Real Estate Company Investment Division. We’re an investment team that does nothing but specialize in working with old school, middle school and brand new kindergarten investors. We have investors around the world that we help buy and sell, and we’d love to work with you. My number is 901-692-7401, or you can go visit us at mymemphisinvestmentproperties.com. And we are sponsored by Title Assurance and Escrow. It’s a title company here in Cordova that does all of our closings, title work, escrows, and I only use Title Assurance and Escrow. So Title Assurance and Escrow, 901-737-3332. Call up here, ask for Chris or April. Frank Torres is joining us. Hey, Frank.
Frank
0:01:21 – Hey, Brett.
Brett
0:01:23 – How you doing, buddy? Frank is with Convoy Home Loans. Frank and I met a couple months ago from, I don’t even know who connected us.
Frank
0:01:31 – It was Scott.
Brett
0:01:32 – Scott, right, okay, yeah. That led into a couple of good clients that you’ve sent my way, a couple of clients I’ve sent your way. So basically I want to just talk about what you’re doing for your clients, the type of products you have. I want to talk about portfolio lending because I know you’re able to do like one loan on multiple properties, stuff like that, and what it entails. Correct. I just wanted to introduce you to our listeners because you’re doing something different. We have lenders that come on all the time. And one of the biggest questions I get from investors is if I want to buy five properties, do I have to do five loans? And very few companies that I know of have a reasonable portfolio product. Let’s use our mutual client, Jerry. Tell us the kind of product you’re putting together for guys like him. He bought seven properties, I think he closed on four last week, he just got six that’s closing this week. So you’re doing those in groups, right?
Frank
0:02:21 – Correct. You know, first off, a little bit about us. Right now we’re ranked number five in the US on Stockman’s Guide for 2023 top originators. We have featured on BiggerPockets, number six in the US as well as the top mortgage broker. But yeah, going back to the portfolio, how that works, we can go up to 80% loan to value.
Brett
0:02:40 – Okay.
Frank
0:02:41 – So essentially, you’re getting one loan that’s blanketing over multiple properties. So why that’s great is because you’re able to save on the closing cost and you’re also getting a competitive rate on the portfolio.
Brett
0:02:55 – Is there a maximum number of properties that you can do in that one loan?
Frank
0:02:58 – Nope. There’s no limit. So you can do however many properties you want. We did, it was 42, it was with a different client, of 42 non-warrantable condos. We essentially did a blanket, so one loan, and that helped them save a tremendous amount on the closing cost. They’re able to maximize the bottom line and get them a competitive rate on it.
Brett
0:03:20 – Give me an idea of what a good interest rate would be for a portfolio loan.
Frank
0:03:23 – Well, you know, it obviously depends on the loan level price adjustment. You know, we’re looking at the sponsor, what their cycle score looks like. It depends on the loan to value ratio. If you were to do, let’s say 80% LTV on a portfolio, that would be in the low eight. And that’s with what’s called a DSDR, debt service coverage ratio. So for your listeners that aren’t familiar with what DSDR is, all it means is we’re looking at the asset itself. So the ratio between the gross rent and the monthly debt service. The principal, interest, taxes, and insurance. And if there’s any association dues.
Brett
0:04:02 – We’ve talked about those before in simplistic terms is basically if the rent covers the payment then you’re covered, you’re approved for that loan. Obviously, if you’ve got a decent credit score, I mean you’re not going to get it if you had 300 credit score and no money in the bank. That’s a 20% down, 80-20 LTV?
Frank
0:04:17 – For DSCR, that’s correct. Technically, we can go up to 85% loan-to-value on a rare case-by-case basis, that’ll make sense but yeah typically our DSDR product we’re doing it at 75 to 80 percent LTV but we’re mostly looking at the ratio so like for example if your gross rents are 1,200 and your monthly payment is a thousand that gives us the ratio of 1.2 so the greater the cash flow the better the term.
Brett
0:04:42 – Gotcha. Okay so $600 mortgage on a property has rent for $1,200 a month then you can get a better interest rate and a better ratio is that what you’re saying?
Frank
0:04:51 – Right. Correct.
Brett
0:04:52 – All right, now are there opportunities in that type of a loan to buy down the rate, to get a better interest rate, to create more cash flow up front, put a larger down payment down? I have some investors that do 40, 50% down. If someone were to do a 50% down payment on a million dollar loan, would they be able to get a better rate, a better interest rate, create more cash flow?
Frank
0:05:11 – Absolutely, yeah. I mean, if they did 50% down, I mean that’s probably gonna prove their rate about 50 to 75 basis points.
Brett
0:05:18 – Okay.
Frank
0:05:19 – On the portfolio product. But even on our single asset as well.
Brett
0:05:23 – Yeah, I sent you one investor specifically that does that. His name’s Michael, he does 50% down. Oh yeah. That’s why I sent him to you, because I thought he’d be a perfect fit, because he wants to do something similar. He’s gonna liquidate or refi four or five of his properties here, and then we’re gonna roll that cash out toward the Ford plant in Galloway and Mason, Tennessee. So that might be a good fit for him. Exactly. So other than the portfolio lending, which is all I’ve dealt with you on, what other type of loan products do you have out there? Obviously, it’s called Convoy Home Loans. So I’m assuming you all do home mortgages, you all do single one-out loans for investors, refis, cash-out refis. What’s your laundry list of products?
Frank
0:05:59 – We essentially do any type of loan that’s tied to real estate, except for reverse mortgages and USDA. So our main clients are investors. We’re essentially a real estate investor’s best friend. We specialize in investor products. So a lot of the loan programs that we’re doing with our investor clients is anything from DSCR to bridge loans. loans, but we can also do the boring stuff as well, conventional, you know, 25% down, everyone else does. But, you know, we really look at the investor situation and what will make the most sense, what’s going to maximize their bottom line. And that’s typically what I’m recommending to them. But yeah, any type of loan really that’s tied to real estate, we can do it.
Brett
0:06:45 – Well, you know, in the real estate world, there’s a lot of different aspects and facets to real estate, lending agents, you name it. Our team is committed to the investment world, I always have been. I’ve seen put a gun in my mouth and drive somebody around all day, look at their next dream home. But when you watch the economy change and the housing market change, who in this business is still booming? The investment agents, the investment lenders, those are the guys that are still kicking it. The guys that suck all the wind out of the market and went after all the homeowner business, those are the guys starving to death right now and hanging their licenses up for retirement. So I think y’all did a good choice by sticking with the investment world because as my previous business partner once said, there’s always someone buying and always someone selling in the investment world. Business is always there.
Frank
0:07:29 – Yeah, it’s always there, exactly. You get to repeat business, referrals, and I like to say we’re expanding in a contracting market. And like you said, there’s always business out there, especially in the investment space.
Brett
0:07:42 – Yeah, there’s always business. I’ve had a great year so far this year. We preach to the people that listen to our podcast about really understanding the way the market changes, the way the investment changes. The real estate investment market is an ever-evolving animal, and it goes one direction for a while, and then someone reinvents the square wheel and goes back to the way it used to be. If you stay on top of what’s current, you can do well in this business. It starts with obviously getting a good agent. It starts with getting a good lender that understands what your needs are and what you need to accomplish to make it work. Let’s face it, Jerry, I mean, Frank, you and I don’t get paid until what happens?
Frank
0:08:19 – We close it.
Brett
0:08:20 – We close. Right. I can write contracts all day and you can write applications all day, but until we close something, we don’t get paid. It’s to our best interest to keep our investors on the cusp of the newest way to do these things. Frank, give us your contact information, website for our listeners, so if somebody wants to reach out to you. By the way, if they reach out to you from our podcast, I would assume you’d send them back my way, but if not, it’s all right.
Frank
0:08:43 – Of course, man. I know, I appreciate that. You can reach me at my direct line 323-673-5782. Unable to answer, probably from on the line from another client or I’m helping someone else out, you can send me an email to frank at convoyhomeloans.com. That also works. Just let me know that you came from the 5 O’Clock Somewhere podcast and I’ll get you set up.
Brett
0:09:06 – Absolutely, he’s taking good care of the clients that I’ve sent to him and I do appreciate that because listen, we wrestle with lending for especially newer investors. We wrestle with it because a lot of people just don’t focus on the investor product. They want to do the easy home loans and then whenever the owner-opt market goes down, they want to jump back into the investment side, but they don’t have the products nor they have the expertise to really put something together that makes sense. So I appreciate what you’ve done for my guys and I want to repeat Frank’s number, area code 323-673-5782. That is Frank’s direct cell number. If I don’t reach Frank by phone call, I just shoot him a text. He always responds when he gets time. So I would encourage you, if you’re looking at buying investment property, reach out to Frank, discuss what your plans are, your goals. Then your next call should be to me, 901-692-7401, and between us, we can put together a good, solid investment plan that makes sense, makes you profitable, and builds for your future. All right, Frank, have a good day, buddy. I’ll talk to you soon.
Frank
0:10:03 – You too, Brett. Take care.
Brett
0:10:04 – Thank you, man.