BRRRR Model Question

3 Replies

So here's the current situation. I'm in the process of picking up 5 properties right now. 4 of them I am using homestyle loans and the 5th i'm paying cash.  Each property has appraised for at least double what I'm paying for them, but I will have 4 different loans.  Now my goal was to get them under one loan 6 months from now.  How do I go about doing this and can I refi for more than what I paid since they appraised so much higher? With the rents I expect to receive, I will be able to still cash flow after a higher refi, and I would love to have a little more cash in my account in order to pick up more properties.  Your advice is greatly appreciated!

Fannie Mae guidelines require 6 month seasoning for cash-out refi. Since you are looking for a blanket loan for multiple properties, there won't be a fannie mae restriction and it will be up to your local bank (or whatever lender you use) to determine timing on when they will lend, and how much they'll lend. My advice is to call local banks and talk to their commercial lending department - any track record you can show as a landlord (apart from these recent acquisitions) will go a long way in getting approved.

Blanket loan

DEFINITION of 'Blanket Mortgage'

A mortgage which covers two or more pieces of real estate. The real estate is held as collateral on the mortgage, but the individual pieces of the real estate may be sold without retiring the entire mortgage. This is an alternative to a developer having to take out numerous individual properties within a large property purchase that they intend to sell in individual parts. The blanket mortgages are typically taken out to cover the costs of purchasing and developing land that developers plan to subdivide into individual lots.

You need to interview small bank managers, they will point you in the right direction.  Do it in person.  Fill out a 1003 app neatly and give it to them.

@Brian Burke

@Bryan Hancock

There are as many answers to this question as there are lenders. That is to say that every lender has different guidelines, restrictions, hot buttons, and asset class preferences. Your best bet is to call around and present your question to local banks, small local credit unions, and the national SFR buy-to-rent finance companies such as B2R, Colony and Firstkey and compare terms, rates and fees. This isn't a loan scenario for mortgage brokers that place FNMA/FHLMC style home mortgages.

The shorter answer is yes, you can do this, but you have to shop around a bit.