Financing recommendations for complicated and new ownership structures

[Justus Gries]

I'm hoping someone here can provide some recommendations or advice as I navigate a situation I'm sure most of you are planning one way or another. 

I've inherited a modest real-estate portfolio: 23 doors across 2 multifamily properties, 3 SFH long-term rentals, 2 condo long-term rentals, and 2 single family homes that were personal use that I'd like to transition to short-term rentals. The assets are held directly in a trust, free and clear, and I'm currently finalizing the new trust structures per the will. All the properties are moving into their own LLCs with a holding LLC to manage/operate/grow the portfolio. I've onboarded a property manager to handle the multi-families and SFHs.

I've been using the existing cash flow to handle maintenance, repairs, and capital improvements but need to raise more capital to accelerate the remaining projects this year and get to cash-flow I can support myself on. I'm currently seeking out portfolio DSCR loans or small business loans through local banks in order to tackle the remaining deferred maintenance and capital improvement projects but was wondering if anyone had other recommendations or ideas.

I currently live out of state from the properties and I used the BiggerPockets lender finder but only two vendors were provided and one said they don't do portfolio DSCR loans; I'd like to use the cash-flowing properties to help fund the ones that need to transition from personal to investment. Based on the existing work I've completed, I believe I'll only need a 20% LTV to get the properties fully stabilized. I have a meeting with a bank later this week to see if I can get a line of credit for the holding LLC but they require the business to be at least 2 years old under the same majority ownership during the last two years. I've been doing this for just a little over two years now but am concerned they won't view it that way.

[Drew Sygit]

Agree with @Greg Scott about the financing.

Portfolio loans will limit future sales, refinances, etc. Better to just get a single loan on each property as needed.

Regarding the 2 SFRs that were personal residences, you should be inheriting them at their currnt market values. So, there is no tax benefit to selling them. If you havent already, check with a CPA that knows SFR rentals.

Condos are easier to manage, but often do not cashflow as well as houses - unless in a destination location. Then, they may be great to hold onto. Check with a local agent or PMC (hopefully the one you hired) with a LOT of rental experience. 

QUESTION: if the properties are all free & clear, why won't the cashflow cover rehabs, requiring loan(s)? Are you using some of the cashflow to live off? 

Why the rush for capital improvements? 
- Have seen MANY newbies fix rentals up as if they were going to llive in them instead of the SMARTER strategy of "Maintaining to the Neighborhood":(