When refinancing a rented property does it have to be serviced by a property manager?

Question

Hi,

I am an out of state investor, currently rehabbing a property which I plan to rent out and refinance in a few months.

From what I was reading about refinancing requirements - seems like some of them require the property to be managed by a management company.

Can I self manage this property and still get a refinance? (I have boots on the ground in case needed)

Thanks

Robin Simon · Answer

Nope, a property manager wouldn't be required as part of the DSCR Loan underwriting process

Adam Bartomeo · Answer

The simple answer is that they don't care if you are self-managing or if there is a PM.

Steve K. · Answer

This is more common for commercial (5+ units, often lenders in this category want the owner/operator to have experience self managing or hire professional management), and not very common 4 units and under, IME.

Calvin Thomas · Answer

This. A building owner across one of my buildings has owned a building since the 80s. Since he's a one person shop (along with a super), he refinanced his 3 million dollar property and the bank required him to hire a property management company. While we do not generally manage properties outside of our own properties, I did him a favor and added his property under our umbrella. Since we are already registered with Fannie and Freddie as a property management company, he was able to get his mortgage. I was happy to help; for a small fee.

Erik Estrada · Answer

It depends on the lender, but majority of DSCR lenders will not have this requirement to close on a refinance.

John Morgan · Answer

@Yael Maroko

I’ve done several refinances out of town and nobody asked or cared. I just gave the appraiser my tenants phone numbers. And always tell them the number you’re looking for on the appraisal. lol

Patrick Roberts · Answer

If you're using a DSCR loan, this will be lender specific. A few of the DSCR investors we work with require the owner have landlord/property management experience OR that a licensed PM is in place to manage the property. Conventional does not have this requirement at the moment, but there are rumors that Freddie will be updating guidelines soon to require 1 year of landlord/PM experience for investment property loans. If Freddie does this, my guess is Fannie will follow suit.

Sean Macneir · Answer

Nope most lenders won’t care. As long as the property is claimed as self-managed you should be good. If the one lender won’t, the next one will just wake sure there is no deferred maintenance.

Calvin Thomas · Answer

It depends on the bank. Some banks over a certain amount of money may require third par-y property management for the first year or two.

When refinancing a rented property does it have to be serviced by a property manager?

When refinancing a rented property does it have to be serviced by a property manager?

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