The Banks Don’t Care

Many investors fall in love with the ‘idea’ of having a large property portfolio as it sounds sexy and impressive for sure. Don’t get me wrong, this can be a good thing. But at times, having a large portfolio can be a real pain in the arse!

When it comes to building a portfolio, it’s not about how many properties you own. It’s about the outcomes those properties create for you.

But even if you have enough money to take out a loan with an 80% loan-to-value ratio and every property that you currently have generates positive cash flow, it doesn't mean that it will be easier for you to get a loan.

The banks don’t necessarily care about any of that stuff. They have their own set of rules and criteria of who they like to lend money to and who they don’t. In fact, it’s often very counterintuitive, you build a larger portfolio than most and the banks place a higher risk rating on you.

This is because the banks and the government don’t want you to be a successful property investor who owns 8 or 9 properties. They only want to work with good boys and girls who do what they’re told, pay their taxes, and live like everyone else. They don’t want all of these crazy people running around being financially free and doing what they actually want to do. This lending issue is one of the key reasons 99% of investors never get past property number three.

My point is that you’ve got to get strategic with how you build your portfolio. You can’t just ‘buy and hope’ that you’ll end up with a successful portfolio. You need to have a strategy behind everything that you do to ensure you’re buying the right properties, in the right area, with the right lending structure, at the right time of the market.

Strategy is everything, perhaps more so now than it’s ever been. The question now is what strategy will work best for you? How do you make the right choices to move from where you are to where you want to be?

That’s where I come in.

— Todd Polke