Can you refinance a loan that covers three properies into one??!

Question

Hi BP users!I have a question about refinancing. So right now I'm looking at using a private lender to lend me $330,000 to cover 100% of my costs for 3  Condo units I plan to rent out. The payback method is essentially paying an 8% interest on it for 25 years and at the end of the 25 years I have to pay back the the full principal of $330,000. I want to refinance after a year or two which the lender said is OK.

my question is....will I be able to get a conventional lender or bank to refinance this $330,000 loan (assuming I have 20-25% in cash to put in as equity) as one 30 year conventional loan? Does it matter that the loan technically covers 3 different units?

Thank you for your help!!

-David

David Zheng · Answer

Chris Masonwell to start the lender agreed to pay 100% up front. I guess during the refinance time I was expecting to fork over 20-30% per property. if I saved all my rental income and extra from my full time, I'd be able to do that in 2 years

Chris Mason · Answer

Correct, any sort of fannie/freddie lender is going to require you to have skin in the game for each property.

Chris Mason · Answer

Oh this would be a super fun one!!!

I would want to do it as 3 refinances on 3 properties with simultaneous closings on all 3. And this would keep you in sexy 30 year fixed fannie/freddie financing, and away from the gross hard money people.

Each individual pay off would say like "balance of new loan: $110k. Cash to close from borrower needed: $210k."

And each of the three would have $110k coming from the other 2, so it would be an awesome/fun chicken or the egg thing.

At $110k on each condo, what would LTV's look like David?

David Zheng · Answer

ahhh ok, so I guess you cannot take this "blanket loan" and refinance it into one big conventional loan?

Preston Jacobson · Answer

Try a local or regional lender. I know it as a 'blanket loan' but not a conventional loan. If these are the only three you own and depending on whether the Condo Association can be underwritten to a conventional loan program, my understanding is that you could make it into 3 conventional loans.  I believe you can have four loans under fannie mae guidelines and up to ten conventional loans with freddie mac guidelines. This information changes from time to time, so I'll defer to a local lender who is more familiar with the market.