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5-Year Rental and Investment Property Loans

First Capital Trust Deeds originates 5-Year Private Money Rental and Investment Property Loans with rates starting at 5.50% up to 9.99% Interest-Only.  The program pricing falls in between conventional financing (Fannie Mae / Freddie Mac) in the 4.00% to 5.00% range and traditional asset-based hard money loans priced between 10.00% to 13.00%.  

These loans can be an excellent fit for the self-employed real estate investor who actively flips houses inside an LLC while also holding a growing rental property portfolio inside that same LLC or in a separate LLC, Trust, or Corporation.  Most of the time, investors with this legal and financial structure, with all their tax deductions from mortgage interest, property taxes, and depreciation, have difficulty obtaining conventional investment property financing unless they have a well established depository relationship with a community bank or credit union.  Or, their Adjusted Gross Income (AGI) is so high that it offsets all the deductions.  However, that would most likely defeat the purpose of having all the deductions in the first place. 

Another reason real estate investors seek out private money financing for their property portfolio is that they have exceeded the conventional loan limit for maximum amount of properties financed.  Currently, Fannie Mae limits the amount of financed properties to ten, which includes a borrower’s primary residence.  Freddie Mac allows a total of six properties financed (primary residence plus five investment properties).  

We’ve worked with several real estate investors who started buying foreclosures and short sales at the bottom of the market in 2009, amassing a substantial property portfolio of 20-60 properties.  These investors maxed out their conventional loan limits years ago and have been using the much easier to qualify for 5 and 10-year private money investment property loan programs offered through First Capital Trust Deeds.   

5-10 Year Fixed Rate Loan Features:

  • Rates starting at 5.50% up to 9.99%.   
  • 5 and 10-year fixed rate periods standard.  (3 and 7-year terms also available). 
  • Interest-Only payment options available. 
  • Loan-To-Value (LTV) up to 80% (Portfolio average is 65% LTV).
  • BPO, drive-by appraisal, lender site inspection, or full URAR appraisal required – each lender has different requirements.
  • 1-4 Units preferred.  5+ multi-family properties also allowed.
  • Cross-Collateral or Blanket Loan available (2-50 properties for 1 loan)
  • Sliding scale prepayment penalty during the first 3 years (3%, 2%, 1% of Unpaid Balance (UPB)) on the 5-year program.  10-year program has a 114 month prepayment penalty / yield maintenance period.   
  • Vesting through individual, Corporation, LLC, Trust, Self-Directed IRA / 401K, Foreign National allowed.