SFR/small multis as commercial?

[Trevor Finton]

Good morning BP. Wondering if someone could shed some light on a thought I had about residential investing vs. commercial. Currently I'm doing BRRRR on small multifamilies which qualify as residential but I love the way commercial valuations work with CAP rates and NOI as opposed to comps.

My question is, if I were to pull together several residential properties into a portfolio could they be treated by a lender as a commercial property where I'm better rewarded for decreasing expenses and increasing revenue? If so would it be as simple as 5 or more doors (5 sfr or 1 sfr, 1 duplex and 1 triplex) or would it need to be 5 properties?  I assume all would have be refinanced to the same loan, correct? I would see my downside as needing to sell off the entire portfolio should I divest as opposed to individual properties correct?

Thanks in advance.

Trevor

[Charles Carillo]

@Trevor Finton

You could speak to a mortgage broker or your local banks about a blanket loan but we have successfully acquired agency debt on a portfolio of 3 and 4 unit properties; but for agency debt, the loan needs to be $1M+.