Portfolio lending is on the rise. The main reason for this is portfolio lending is not subject to the crazy 4 property rule. Through a portfolio lender, it is possible to have more than 20 mortgages. But those investors looking for conventional loans through lenders such as Fannie Mae and Freddie Mac will run into the 4 property rule wall.
It is obvious that the $750 billion bailout did not do a thing to free up capital. And now the 4 property rule is a slap in the face to all real estate investors. In fact, this particular rule is a complete rejection of the principles that our capitalist society is founded on. In my opinion, the 4 property rule is designed to put real estate investors out of business. Just when the government should be inviting us to participate in the economic recovery.
So, what exactly is the 4 property rule? Well, the new conventional lending rules according to Fannie and Freddie state that a person will be limited to a maximum of four financed properties. This ridiculous rule takes away the ability to invest in real estate in the long term. If you are limited to only four financed properties, you can not flip many properties simultaneously or have a rental portfolio of any significance.
And, as an investor this includes your primary residence! Again, this rule does nothing to help real estate investors. It is simply protectionism. And, as we all know, protectionism usually backfires. It does absolutely nothing to help the market and overall economy. Instead, the 4 property rule can significantly weaken the economy.
Before the subprime meltdown, investors took advantage of rapidly increasing real estate values. They would purchase properties at low prices and then sell high. Sometimes, real estate investors purchased huge volumes of properties to resell. The affordable housing they provided had a positive impact on our economy.
That is, in the absence of the 4 property rule, the sale of massive volumes of real estate would yield a number of positive effects. For example, the revenues generated could be invested into the stock market. Once invested, it would provide liquidity to many different companies. It would also generate significant tax revenue to the state and local governments. And, of course, the wealth created by this multiplexing of real estate sales would greatly expand purchasing. This would improve the economy in other sectors of the market. With the onset of the 4 property rule, all of this would cease and much of the economy could be undermined. Hopefully, this rule will eventually be revoked and return a more free market approach to the world of real estate.
Then again, regardless of whether or not this rule is revoked, portfolio lenders are not restricted to such a rule. If you wish to seek massive financing, a portfolio lender is the lender to visit. - 14890
It is obvious that the $750 billion bailout did not do a thing to free up capital. And now the 4 property rule is a slap in the face to all real estate investors. In fact, this particular rule is a complete rejection of the principles that our capitalist society is founded on. In my opinion, the 4 property rule is designed to put real estate investors out of business. Just when the government should be inviting us to participate in the economic recovery.
So, what exactly is the 4 property rule? Well, the new conventional lending rules according to Fannie and Freddie state that a person will be limited to a maximum of four financed properties. This ridiculous rule takes away the ability to invest in real estate in the long term. If you are limited to only four financed properties, you can not flip many properties simultaneously or have a rental portfolio of any significance.
And, as an investor this includes your primary residence! Again, this rule does nothing to help real estate investors. It is simply protectionism. And, as we all know, protectionism usually backfires. It does absolutely nothing to help the market and overall economy. Instead, the 4 property rule can significantly weaken the economy.
Before the subprime meltdown, investors took advantage of rapidly increasing real estate values. They would purchase properties at low prices and then sell high. Sometimes, real estate investors purchased huge volumes of properties to resell. The affordable housing they provided had a positive impact on our economy.
That is, in the absence of the 4 property rule, the sale of massive volumes of real estate would yield a number of positive effects. For example, the revenues generated could be invested into the stock market. Once invested, it would provide liquidity to many different companies. It would also generate significant tax revenue to the state and local governments. And, of course, the wealth created by this multiplexing of real estate sales would greatly expand purchasing. This would improve the economy in other sectors of the market. With the onset of the 4 property rule, all of this would cease and much of the economy could be undermined. Hopefully, this rule will eventually be revoked and return a more free market approach to the world of real estate.
Then again, regardless of whether or not this rule is revoked, portfolio lenders are not restricted to such a rule. If you wish to seek massive financing, a portfolio lender is the lender to visit. - 14890
About the Author:
Susan Lassiter-Lyons has been teaching real estate investors the secrets to investor loans since 2002. Her free report, The Death of Real Estate Investing, reveals how to find portfolio lenders nationwide.
0 comments:
Post a Comment