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What Is a Blanket Loan and How Can Investors Use it to Scale?

A blanket mortgage can be a powerful tool for real estate investors looking to streamline financing options for multiple investment properties. They are popular options for investors who want to purchase single-family rentals or small multifamily properties such as duplexes, triplexes, and quadplexes.

In simple terms, a blanket mortgage is a single loan that covers multiple properties under a single mortgage agreement. It may also be called a portfolio loan. Blanket mortgages make it easier to get financing for multiple properties and can be attractive to investors with large real estate portfolios or ambitions to scale.

Should You Consider a Blanket Loan?

Blanket loans are a great financing alternative for experienced real estate investors, builders, developers, and flippers, and they can be used to cover the costs of property purchase and development — including necessary rehab.

For example, a borrower might inquire about Lima One’s fix and flip or new construction loans to quickly take purchase properties they see in the market. If they identify multiple properties they want to purchase, rehab, and put back into the market, a blanket loan might offer more flexibility.

Blanket financing enables investors to diversify their real estate portfolio efficiently by empowering them to purchase and/or refinance multiple properties at once — giving investors more options to scale.

Advantages of a Blanket Mortgage Loan

One of the key advantages of a blanket mortgage is that it allows the borrower to have more cash on hand. For instance, a property owner can save on various costs associated with applying for and closing on multiple mortgages.

The savings are most likely to come on closing costs like origination and processing fees, but some lenders may provide additional benefits based on the total amount of the blanket loan.

With a blanket mortgage, the properties serve as collateral for the loan, meaning that if the borrower defaults, the lender can foreclose on the properties covered by the mortgage.

This is another variation on the asset-based business-purpose loans that Lima One Capital offers. Because the blanket loan is asset-based, borrowers can close with less documentation than a typical bank loan mortgage requires.

Unlike managing individual loans for each property, blanket loans offer a streamlined financing process. Investors can benefit from reduced paperwork, a single payment across multiple properties for simpler bookkeeping, and synchronized loan terms.

Blanket Loans for Real Estate Investors

Scaling up real estate ventures requires a strategic approach. Blanket financing is a tool in that strategy, providing investors with the ability to explore new opportunities and achieve sustainable growth.

Blanket mortgages present a unique opportunity for real estate investors to consolidate and streamline their operations so that it’s easier to scale.  By understanding the intricacies of blanket mortgages, investors can make informed decisions that align with their financial goals and aspirations.

Regardless of your investment strategy, Lima One is here to help. Our experienced team is here to help. We’ll provide you with extensive industry knowledge and private lending expertise and walk you through the loan options you qualify for.

Contact us today to discuss your next deal, or if you have a deal in hand, accelerate the process by applying now.