Portfolio Funding

Multiple Residential Properties – One Loan

For many residential property investors the most frustrating part of their investing activities is finding new funding for each new property after they have reached the “5 door” limit rule with their lender.  Having solid performing assets, but the inability to leverage those assets to continue to grow their business.  Portfolio funding is the ability to bring multiple properties under one property collateral loan so you can better manage those investment portfolios.

Under a well-structured portfolio funding facility the investor gains any number of advantages. 

  • No limitation on the number of properties you have.
  • No limit to the number of properties you want to add.
  • No more “5 door limits”.
  • Significantly improves vacancy management terms.
  • Can improve access to renovation funds when needed.
  • Improves your own internal portfolio management.

By moving to these more sophisticated forms of commercial loans, the investor can often find terms that allows them to borrow additional funds anytime they bring on another qualifying property.

With pre-qualified conditions the investor saves time and effort by being able to focus on the right properties they know ahead of time will move effortlessly into their existing portfolio loan.

Commercial portfolio funding can also be built with flexibility so the mix of property types doesn’t matter – single family homes, triplexes, condos, etc.

Eligibility Conditions

While each portfolio will have its own merits, general acceptance criteria include:

  1. min of 7 to 10 properties,
  2. overall portfolio market values of $2.75 million or higher,
  3. minimum aggregate portfolio debt servicing of 1.25,
  4. geographic proximity – for certain all in one province,
  5. proven property management history.

We can help you pull together the profiles needed.

First Step to Expanding Investment Activities

Portfolio funding is often the logical first step for residential investors looking to expand their activities into multifamily apartments or other forms of commercial properties.  Moving into commercial financing can seem complex at times.  It requires different reporting, different eligibility requirements.  But commercial lending also is so much more flexible for the borrower.  With so many forms of senior and subordinated lending, and so many forms to ownership, multi-investor options and asset coverage, borrowers can often put together financing structures that are really customized to their needs.

We at NorthBrook specialize in helping take those first steps to commercial borrowing with underwriting, financial reporting and ownership option structuring to get you there.

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