How To Finance and Buy Multiple Rental Properties

Investing in multiple rental properties provides real estate investors with an attractive opportunity to build an income-generating portfolio, offering advantages such as increased cash flow, diversification, economies of scale, faster wealth accumulation, and passive income. However, as the number of properties grow, the types of available financing options change, especially as banks hesitate in the current market. This change is crucial for investors to fully examine as the limits imposed by different lending sources may vary greatly.

Financing 1-4 Rental Properties

For most real estate investors, the easiest path to financing your first few rental properties is through traditional mortgages. Most standard lenders, like banks, are willing to provide individual loans for up to 4 investment properties, if certain qualification criteria are met, such as:

  • A good credit score (typically 680+)
  • Conservative loan-to-value rations between 65-75%
  • Proof existing properties are performing well
  • Long-term fixed interest rates
  • Low or no mortgage insurance with sizable down payments
  • No upfront insurance premiums
  • Documentation of W-2/tax return income and assets/liabilities

Many investors find success with traditional mortgages through local banks or a mortgage banker as they often provide a more flexible approach, a better understanding of long-term investment objectives, and access to custom financing programs tailored for multiple investment properties. In essence, traditional mortgages offer a straightforward route to financing several rental properties, provided you meet the necessary financial criteria.

However, as the market has shifted and banks are increasingly selective in their financing, alternatives to traditional mortgages have filled the gap for 1-4 rental properties. One such option is the DSCR loan which is less restrictive and is generally based on the cash flow of the properties versus income, credit and other qualification criteria. To read more about this option, visit our blog on: DSCR Loans.

Financing 5 to 10 Rental Properties

The Fannie Mae 5-10 Properties Program
The Fannie Mae 5-10 properties program enables investors to obtain traditional mortgages for 5-10 single-family rentals, increased from the previous limit of four, through lenders who transfer the loans to Fannie Mae after origination. However, few banks actually offer this program, and compared to conventional investment property loans, the 5-10 program has unique qualification requirements:

  • Minimum 25% down payment on each property
  • Six months of PITI reserves per property to cover vacancies or unforeseen costs
  • On-time mortgage payments on all existing properties for the past 12 months
  • No bankruptcies or foreclosures in the past 7 years
  • Two years of personal tax returns showing rental income/loss
  • Minimum 720 credit score when financing 7-10 properties

While requiring extra qualifications, the 5-10 program offers a way to utilize traditional mortgages for growing a midsize rental portfolio through well-established lenders. By transferring the loans to Fannie Mae, lenders reduce risk while working with qualified real estate investors. For those looking to finance between 5-10 properties, and can find the program offered plus meet its stringent requirements, the Fannie Mae 5-10 Properties Program provides a balanced financing option.

Private Lenders
Real estate investors seeking financing for midsize rental portfolios have alternatives beyond the Fannie Mae 5-10 program, including private lenders like CoreVest. These private lenders specialize in offering products such as rental portfolio loans and bridge loans designed specifically for experienced investors.

What sets private lending apart is its emphasis on property fundamentals rather than personal income and credit scores. This approach prioritizes factors like property appraisals, location, and rental income projections, providing flexibility for investors who may not meet conventional lending standards, but have 5-10 rental properties in their portfolio.

Private lenders also offer other advantages, including quicker approvals, higher leverage, and reduced reserve requirements compared to traditional mortgages. Overall, private lending serves as a valuable financing option for real estate investors looking to purchase or refinance 5-10 rental units, provided they partner with experienced private lenders who can guide them through this alternative financing path.

Financing Options for 10+ Rental Properties

Private Lender – Rental Portfolio Loans
Rental portfolio loans provide blanket financing secured against the combined value of all properties in an investor’s select portfolio. These loans typically require 25% as a down payment and may have slightly higher interest rates than conventional mortgages. However, these type of blanket loans allow investors to tap into capital across their entire portfolio through a single consolidated loan. In addition, rental portfolio loans can provide cash for renovations, holding costs, or expanding the rental property portfolio.

Finding a private lender who offers blanket loans with favorable terms like longer amortization can make payments more affordable and manageable, providing investors financial flexibility without needing to finance each additional property purchase individually.

This allows established rental investors to access larger-scale financing for 10+ unit portfolios through a simplified loan process. Portfolio loans tend to have stricter qualification requirements related to portfolio size, property management experience, and cash flow compared to conventional loans. However, rental portfolio financing enables streamlined and large-scale funding for quicker expansion of the rental real estate business once those requirements are met.


Investing in multiple rental properties offers significant benefits, including enhanced cash flow, diversification, economies of scale, and passive income. However, as the portfolio size increases, financing complexities can arise. Private lenders like CoreVest provide flexible options, from DSCR to Rental Portfolio Loans, emphasizing property fundamentals and offering faster approvals, higher leverage, and reduced reserve requirements. While financing multiple rental properties may seem challenging, experienced investors can navigate these nuances, achieve a diversified portfolio of cash-flowing assets, and access the capital necessary to continue growing with the right lender and loan terms.

CoreVest is a market leader in real estate investment financing needs and has helped thousands of investors finance over 150,000 units across the nation. We’d love to talk with you directly on how we can maximize the value of your investment projects or properties. Call us today at 844.223.7496 or email or email [email protected] to discuss how CoreVest can help you grow!





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