Stuck at 10 Loans? Why Scaling Investors Need a Financing Plan From Day 1

Here’s a common, nasty-surprise scenario many beginner investors have to confront: An investor with a few properties makes a move to expand their portfolio. They have an excellent credit score and are confident that they’ll have no trouble getting future loans. Except that the lender denies them financing. What happened? Actually, the investor did nothing wrong, per se—they just hit the conventional loan limit imposed by both Fannie Mae and Freddie Mac. Most new investors are unaware of this cap, which is 10 properties per investor, including your primary residence, until they hit it. The wrong conclusion to make here is that, as an investor, you don’t have any way of scaling your business. But the cap does mean that you have to do some financing research and planning beyond your ninth property. Investors should be thinking about strategic financing as early as possible if their goal is to scale their portfolio. Here’s how to avoid the nasty-surprise scenario and reframe your investment property financing as a scaling strategy decision made before you buy your first property—not a problem you solve when you’re already stuck. Why Do Fannie Mae and Freddie Mac Have the 10-Property Ca...