Hi All. When you go to do the refi cash out are people using the same bank? Reason I am asking is because the 6-unit building I want to do a refi on, the lender is giving me a hard time. I have a total of 77 units. They state over my entire portfolio my Global Cash Flow is below their standards. I have a total of 3 loans with this particular credit union with a total of 25 units. 23 of 25 units are rented. All 6 units in this building are rented. Overall 68 of our 77 units are rented. I don't really want to switch lenders, but will if need be. I thought lenders look at the property you want to refi not how every property you own performs. What would you all do? Keep trying to work with this lender or find another one.
Thanks for any advice. Charlie-VA
I'd find another one. I think it's best to split your properties between two lenders to get the best terms. They'll both want your business on your next deal, so it keeps their terms competitive.
I'd talk to other lenders. One shouldn't have anything to do with the others.
We usually use a private lender for the upfront loan, as to avoid the loan fees. But overall, I would recommend getting in with more than one bank anyways as sometimes banks go cold and you want to have other relationships to go to. I would look for another bank while also trying to raise your occupancy and cash flow. If you can't find another, you can come back to your current lender when that situation has improved.
Thanks for advice. @Sam @Brian @Andrew. I have other bank choices and will start reaching out to them.
My guess is: your current 12% vacancy rate is scaring your Lender a bit (especially if that has resulted in a current low positive cash flow).
ie. Each purchase is aimed to improve your DTI (ITD) ratio, right? Congrats on your progress...
@Charles Williams I would echo what others have said. Early on when I was developing my portfolio I had one lender that backed everything but I started with another after I bought a property from them at auction that they financed. After that I switched back and forth between the two.
Each lender has their own things going on so one may work better or worse for each deal you're looking at. And letting them know that they are working against a competitor results in better loan packages for you.
I recently started up with a third lender and probably will start with a fourth soon. As your portfolio grows, you will find, depending on the size of the bank that they will want to limit exposure to you as a single borrower or impose restrictions on you like you described so it's better to have multiple options.
Thanks Jeff. I believe you hit the nail right on the head. I currently have 2 bank lenders each with multiple loans. The current lender hasn't given me a definite NO yet, so we shall see. However if they do I have a third lender in the wings.