My Partner and I have 1 rental property currently, valued at 200K. Our goal is to pick up another 3 (at least) by the end of the year. Ideally, we would like to purchase 3 using hard money and refinance out under a blanket loan.
I'm currently looking at 3 we would like to buy. But see 2 possible problems.
1. Two of them are recently rehabbed and selling for very close to 75% of ARV. Seems a little tight if we want to refi and there's a market shift or the appraiser is having a bad day and we don't appraise at the exact amount. Two (2) produce great cash flow, total investment of 108K and rent for $2,800
- Question, Do blanket lenders of SFH look only at comps? Or will they take in to account the performance and Debt service ratio of the properties?
2. The total value of the 3 properties will be about 260K. And we would need a loan for about $180,000 just to clear the HML, and not get any cash out.
Question: Are their many blanket lenders who will lend on such a low amount ,~180K? If we refinanced our first rental, appraised at 200K for $150K would that help? Bringing the total loan amount to $330K?
Each property will be evaluated as a single loan, but the total liens will be on all qualified properties.
If you're talking about a hard money lender, they will usually be easier to qualify but they will have horrible terms and short terms that isn't really fit for holding properties. Use a bank.
Also, look up "release fee" a stated value for each property to be paid in order to release that property, otherwise you may not be able to sell if you need to.
Also, search BP for "blanket mortgage" I've posted info many times. Good luck :)
Hi @Heath Thomas Jr Portfolio lenders will look at the DSCR when considering asset based loans. For example DSCR of 1.20. You are very close with the total minimum loan amount required for some of these loans, $500k minimum and 5 properties. Interested in learning more, let me know. Happy to help and congrats on growing your portfolio.