Portfolio lending is becoming increasing popular. One of the reasons for this is portfolio lending is not restricted to the horrific 4 property rule. Through a portfolio lender, it is possible to acquire a multitude of mortgages. However, those looking to procure loans through entities such as Fannie Mae and Freddie Mac will run into the 4 property rule wall.
It is understandable that new rules need to be put in effect to prevent the fiasco that precipitated the nefarious $750 billion bailout bill. However, the onset of the 4 property rule is among the most egregious. In fact, this particular rule is a complete rejection of the principles that the free market is founded on. That is, the 4 property rule is a massive overreach of government regulation designed to limit the free market. Worst of all, this type of regulation limits a great deal of personal liberty and freedom.
So, what specifically is the 4 property rule? Essentially, the new rules of conventional lending state that a person will be limited to four financed properties at one time. Again, this is a thoroughly absurd rule that undermines many benefits of real estate investing. Basically, if you are limited to only four financed homes, you can not flip property in vast numbers.
This type of rule does very little to help our economy recover. In my opinion, it is a form of Socialism. And, last time I looked we lived in a country founded on Capitalism. So, this rule overall does nothing to improve our situation and in fact the 4 property rule can significantly weaken our economy.
For example, prior to the current economic meltdown, many legitimate investors took advantage of skyrocketing real estate values. They would purchase properties at low prices and then sell high. In some cases, real estate investors would purchase significant volumes of property for resale. Some investors would purchase literally dozens of properties for resale. The profits derived from this wholesaling had an enormous benefit on the overall economy.
If there were no 4 property rule, the sale of of real estate would lead to a number of positive effects. For example, the revenues generated would lead to increased liquidity. It would also generate significant tax revenue to the state and local governments. And, of course, affordable housing would be plentiful. With this 4 property rule, none of this is possible. Hopefully, this rule will be overturned so we can return to a free market approach to investment real estate.
Portfolio lenders, thank goodness, are not bound by this crazy rule. If you need to finance multiple properties, a portfolio lender should be your new best friend. - 16928
It is understandable that new rules need to be put in effect to prevent the fiasco that precipitated the nefarious $750 billion bailout bill. However, the onset of the 4 property rule is among the most egregious. In fact, this particular rule is a complete rejection of the principles that the free market is founded on. That is, the 4 property rule is a massive overreach of government regulation designed to limit the free market. Worst of all, this type of regulation limits a great deal of personal liberty and freedom.
So, what specifically is the 4 property rule? Essentially, the new rules of conventional lending state that a person will be limited to four financed properties at one time. Again, this is a thoroughly absurd rule that undermines many benefits of real estate investing. Basically, if you are limited to only four financed homes, you can not flip property in vast numbers.
This type of rule does very little to help our economy recover. In my opinion, it is a form of Socialism. And, last time I looked we lived in a country founded on Capitalism. So, this rule overall does nothing to improve our situation and in fact the 4 property rule can significantly weaken our economy.
For example, prior to the current economic meltdown, many legitimate investors took advantage of skyrocketing real estate values. They would purchase properties at low prices and then sell high. In some cases, real estate investors would purchase significant volumes of property for resale. Some investors would purchase literally dozens of properties for resale. The profits derived from this wholesaling had an enormous benefit on the overall economy.
If there were no 4 property rule, the sale of of real estate would lead to a number of positive effects. For example, the revenues generated would lead to increased liquidity. It would also generate significant tax revenue to the state and local governments. And, of course, affordable housing would be plentiful. With this 4 property rule, none of this is possible. Hopefully, this rule will be overturned so we can return to a free market approach to investment real estate.
Portfolio lenders, thank goodness, are not bound by this crazy rule. If you need to finance multiple properties, a portfolio lender should be your new best friend. - 16928
About the Author:
Susan Lassiter-Lyons has been teaching real estate investors the secrets to creative financing since 2002. Her free report, The Death of Real Estate Investing, reveals how to find portfolio lenders nationwide.
No comments:
Post a Comment