Put several rental properties in one big loan... is this possible??

Question

I figure this must be a fairly common problem. So I have seven rental properties (all SFRs in the same city but not exactly in the same place). Each one has a different interest rate and term and is serviced by a different lender. Now the properties have appreciated much over the past few years so I've got quite some equity tied up in these, but refinancing each one of them is going to be both time-consuming and expensive. Is it feasible to "consolidate" loans on separate rental properties into one big loan?

David Beard · Answer

Don't overestimate the closing cost savings in a blanket loan.  You still need appraisals, title searches, title insurance, etc., on each individual property.  Also, you have to be careful regarding the inclusion of appropriate release language, should you want to sell one of the properties.

More importantly, if you currently have low rate conventional 30-year financing, then beware of the higher rates and shorter terms associated with blanket loans from local/regional bank lenders.  You might be better off using HELOCs on your rentals to tap the equity.

Phillip Dwyer · Answer

Were you able to find a lender?

Bryan H. · Answer

A lender came to our local REIA meeting the other day talking about this. They love investors. They make 98% of their loans for residential rentals. They will put 11 properties in one loan and you can have as many as you want. They lend based on projected rent roll and personal DTI, so you don't need 2 years of tax returns.

So, yes it can be done. It is very specialized but lenders are out there.

Now I just need to find a bunch of rental properties to purchase.

Darrin Carey · Answer

@Haixia Shi

It can be done, but it is a niche product. as @Ellis San Jose  said, look at smaller banks in the area, especially the area where your rentals are located. We have lenders in our area that will do blanket mortgages, although they do not advertise it.

I'm not aware of a national lender with this product, but I am looking for one.

Ellis San Jose · Answer

You are looking for a blanket loan. Not easy,  talk to a variety of bankers in your area and tell them you are looking at moving your entire banking relationship.  Try smaller banks first then approach larger banks & ask to speak with a private banker.  Relationships are everything in this type of situation because this isn't typically an off the shelf product.

It may take a while, you will need full-docs & strong financials to get it done.

Bryan Davis · Answer

I would expect there to be some kind of commercial loan geared toward such things. Have you shopped any lenders? What about private lenders?