Blanket Loan or keep my SFRs on seperate notes?

Question

Looking into refinancing some of my units.  Should I consider a blanket loan that wraps them all together or keep them separate for accelerated pay off schemes? Thank you in advance for any quality advise.

Will Gaston · Answer

@Daulton H. I have 10+ blanket loans and enjoy the flexibility that comes with portfolio lending.

However, one big downside that I've noticed is when trying to sell only one or a couple of the properties associated with the note. It can get pretty tricky because the bank will want the loan to stay at the current LTV. That means that they will only disperse roughly the portion of the proceeds that still keeps the same LTV in line. So you can end up selling something and not having much cash to show for it.

If I had to do it all over again I would package together similar properties that I would likely want to sell all together. Just my .02 cents.

Bill B. · Answer

@Daulton H.

Most blanket loans are also “commercial loans”. Meaning it’s hard to find a 30 year fixed “reasonable” rate. At least until you’ve endeared yourself to your local bank.

You’ll find a lot of 5-10 year then adjusting rates. If you plan to snowball there’s little to no advantage and I would say even a disadvantage. With the individual loans you’re required payment goes down every time you pay one off. Even after you’ve paid 90% of the blanket loan off you’re required to pay the same.

Daulton H. · Answer

@Victor N. Thank you. I will likely stay with seperate loans for the reasons you mentioned as well as to be able to pay them off at accelerated rates. “Snow balling”

Frankie Woods · Answer

How many loans do you have?  Don't make it complicated until you have to.

Blanket Loan or keep my SFRs on seperate notes?

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