Refinancing Portfolio Into Blanket Loan & Equity Line of Credit

12 Replies

Hey All,

Currently I am holding 6 conventional loans and would like to combine 5-6 of the notes into one refinanced blanket/portfolio loan. My objectives are:

1. Hold less notes, so I can finance more properties conventionally. 

2. Reduce the number of notes, so I can obtain investment loans at 20% down, rather than 25% down

3. Free up funds for down payments either through a cash out refi or investment property equity line of credit. 

Questions

1. Does anyone have experience combining notes into a blanket loan effectively? If so, what type of bank did you go through and did you run into any issues

2. Is it possible to get an investment property line of credit without any of the properties being my primary residence? 

Any suggestions and or feedback is greatly appreciated. 

Thank You,

Jason

Hi @Jason H. ,

That sounds to me like, if you wanted, you could stay in the 30 year fixed residential world and consolidate 6 down to 3 or 4.

For financed properties 5 and 6, there is no extra 5% down payment required for multi-family properties, though individual lenders may have overlays stating otherwise. 

So that would give you two or three more properties of runway. 

Thank you for the feedback. Would I be able to refinance 2 conventional loans into one conventional loan or would I have to refinance into a commercial blanket/portfolio loan?

@Jason H. That won't help you...the limitation is on the number of "mortgaged Properties" not number of loans. Six properties with 2 Mtg.s each counts the same as six properties with one blanket loan.

@Wayne Brooks I've heard the limitation is on # of mortgaged properties and I've also heard from others, the limitation is on the # of notes. Thank you for the clarification.

Is there anyway to achieve 20% down on my next purchase rather than 25% down? 

I refinanced 14 properties, all with mortgages, into one blanket commercial loan earlier this year. It went very smoothly. Costs were high because I had to pay for appraisals, title insurance, legal fees to draft docs, etc.

It saved me about $4,000 per month in payments. I actually plan to do it again next year with other properties, so that tells you I would do it again.

The commercial loan does not show on my credit report (I don't think) and I was told by another bank that it is not included in the FNMA limit.

Originally posted by @Jason H. :

@Wayne Brooks I've heard the limitation is on # of mortgaged properties and I've also heard from others, the limitation is on the # of notes. Thank you for the clarification.

Is there anyway to achieve 20% down on my next purchase rather than 25% down? 

Assuming the next one will be MFR, refinance into having 5 or fewer properties that are financed. Commercial works, but like I said you have sufficient equity that you could stay in residential 30 year fixed a little while longer if you wished - shove the debt on a bunch of properties into a few (where there is the equity to absorb it), and poof now you have a few properties owned free and clear on paper.

@Glenn Kopensky , thank you for your feedback. Nice to hear refinancing into a blanket loan worked for you! I've also heard that a commercial loan doesn't show on a credit report or included in the FNMA limit. Can anyone verify if this is in fact true?

any property 1-4 unit residential property that is in your name or has financing on it in your personal credit (your names on the note) is considered a financed property so no matter if it's 8 properties and one single blanket loan or if it's 8 individual properties with 8 individual loans. Both of the scenarios above would count as 8 financed properties.

The rule whereby it still counts as a financed property if you own 25% or more of an LLC that held title to your property and held obligation on the mortgage note recently been removed, however I have not guinea pigged this new update yet. I usually am skeptical till I fund one.

If the rule is truely removed then it means you can shift properties around into LLC's for title and financing obligation purposes to reduce your financed property counts. The only issue is only commercial or portfolio lenders will lend to a LLC so you'd have to payoff loans in your personal name with these commercial and portfolio loans to remove them from your financed property count.

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