Multifamily Refinance/Consolidation of Renovation Debt

Jacksonville, FL · Member since 2019 · 43 posts · 76 votes

I am nearly complete with my first multifamily purchase and renovation. 12 unit in great area of Jacksonville, FL. I have seller financing on the purchase and funded the renovations through personal credit line that matures in 90 days. Looking for ideas on how to refinance or consolidate roughly 250k into another loan while keeping my seller financing in place on the note. If anyone has thoughts or advice I would enjoy your thoughts or experiences on what any of you have done in this situation. Thank you for your time!

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Devin PetersonBusiness Member
Lender · Sarasota, FL · Member since 2022 · 2k+ posts · 670 votes
3y
IF you are looking for easiest way to qualify it would definitely be through a DSCR / global commercial refi program. The seller's financing note may enter in a few more private/untraditional lenders willing to go the dscr route but may stick you to some tougher terms.
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Dennis Muno
Lender · Denton, TX · Member since 2023 · 349 posts · 80 votes
3y
Quote from @Jake Peetz:

I am nearly complete with my first multifamily purchase and renovation. 12 unit in great area of Jacksonville, FL. I have seller financing on the purchase and funded the renovations through personal credit line that matures in 90 days. Looking for ideas on how to refinance or consolidate roughly 250k into another loan while keeping my seller financing in place on the note. If anyone has thoughts or advice I would enjoy your thoughts or experiences on what any of you have done in this situation. Thank you for your time!

So, generally this would be a commercial refinance. Usually I have seen DSCR refinances where up to 8 units are allowed. I haven't seen a 12 unit DSCR but it may be possible. I'm sure some lenders may have such options.

For a DSCR the rents vs the PITI(principal & interest, taxes and insurance) and FICO will be used to qualify for the loan, never your personal income. Commercial will also do same for a 12 unit but commercial will be the way to go. Ask your lenders if they will do/have a commercial DSCR option.

Since it's commercial, you may get 65-75% LTV for a refinance(will depend on market rents, insurance, taxes, risk assessment, current state of economy, location,etc). You can do a cashout refi if lender will allow, to get some money to payoff your personal credit line and then refi the seller finance- if a lender will agree. Will vary from lender to lender and also their risk tolerance
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Kyle A.
Investor · Las Vegas, NV · Member since 2022 · 47 posts · 23 votes
3y
Quote from @Jake Peetz:

I am nearly complete with my first multifamily purchase and renovation. 12 unit in great area of Jacksonville, FL. I have seller financing on the purchase and funded the renovations through personal credit line that matures in 90 days. Looking for ideas on how to refinance or consolidate roughly 250k into another loan while keeping my seller financing in place on the note. If anyone has thoughts or advice I would enjoy your thoughts or experiences on what any of you have done in this situation. Thank you for your time!

Are you looking to refi into long term debt? You could try the commercial dscr route, but it's rare they'll take second position behind seller financed portion, and interest will be higher than agency debt. If seller is willing to take second position behind bank that'll increase your chances. Really depends on current valuation, how much equity you put into it, and your loan positioning.
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