Cash out refi to purchase more units
Lets supposed I owned 5 Properties (3 duplexes and 2 SFH) with 325K market value and purchased them with private money with 10 year repayment period.
The properties would be owned by an LLC for 1 year and showed a positive cash flow of 20K with the private loan
(Cash flow take into account they typical things Taxes, Insurance, maintenance, capex, vacancy...)
After one year suppose I wanted to do a cash out refinance 80% LTV (260K) using a
Commercial Loan @ 5.5% with a 5 or 10 year term and 25 year amortization
with the change in debt service cash flow would go down to 15K per year (Cash flow still takes into account they typical things Taxes, Insurance, maintenance, capex, vacancy...)
I am comfortable with the cash I would have on after the refinance after paying off the private money
My question is do you think a commercial lender would make a loan on the bundle of properties?
Is there anything that I am missing ?