Blanket loan for multiple properties

18 Replies

Hey everyone,

I have a question about financing and multiple properties. I currently own 3 properties, all still carry a mortgage. Is there any banks or lenders that offer a loan to cover all three properties (or multiple properties in general) at once? Would be much easier to take out equity loans if everything was under one loan as opposed to taking out an equity loan on each individual property.

Thanks,

Jay

Jay,

Yes, I use Philadelphia Federal Credit Union but you will need to go through the commercial side for either a blanket or portfolio loan. They do these for us all the time.

Alan

We can do that as long as the NOI (net operating income) supports the new debt. Many times we can pull out equity after combining the notes. We have a very unique setup at ACS. We can do lending across all 50 states. inbox me or hit up my website to schedule a call if you want me to look at your situation.

@Jay Sechowicz commercial loans are typically 20 or 25 yrs. The advantage is those loans are based on the asset itself and the Net Operating Income (noi). As long as you are a solid citizen, they lenders dont' really care about your ability to repay like a traditional mortgage. the other advantage is, as long as its through a entity, when you cross collateralize, you get into a commercial loan and you reset your ability to borrow using fannie and freddie money.

At what point (generally speaking) would it become worth it to go from commercial? Anyone have any reading on commercial lending... apply for traditional loans over and over a huge pain.

I'm not a fan of this. The lender gets paid a lot when you do this and the crossover point is not until a few years.

@Jay Sechowicz So let me lay it out from a lender side. We do blankets personally but I want to share the downsides for you, the investor, as unbiased as I can. Blankets, the lender can make more (it depends on how it's structured), but in reality you lose your leverage. The problem is, you can't pull out a single property as easily and sell it if you decide to as you've structured the loan on all properties.

It does save money at closing of the loan for you, but it ends up being around net neutral at the end of the loan cycle. 

All of that said, both have benefits and draw backs and benefits. If you want more information on how lenders structure (or may structure) blanket vs. individual let me know and I'll type out a demo scenario.

@Jesse Goldberg thanks for the clarification.  I think I am more interested in just consolidating the loans to make it more organized and also if I needed to pull out equity, I like only having to do it once.  If the money ends up coming out neutral I think I would be okay with that because I bought myself a convenience factor.  I do see your point of if I ever needed to sell that could become a little tricky.  

Be aware you will also pay higher closing costs and higher interest rates on the commercial loan vs the residential loans you currently have.

@Jay Sechowicz

Any advice on auction purchased property? If I buy 10 units at 15k each, could I obtain a blanket loan for $150k and would it be prudent? I assume that would be the best way to structure the loan.

8 of the 10 are currently rented. Currently slum lord rented but I’ve spoken to the community association president who’s been trying to get the owner to sell for years. He said his association would do everything it could to help me renovate and take time and help with bad tenants. I also thought opportunity fund could be great too since I’d probably gut most of them.

@Jay Sechowicz you would be looking for portfolio loan for investor. Yes they can be 30y. The only item to consider is the location of the properties if they cross state lines it can get complicated. Origination costs are reasonable (depending on the lender of course) it's a matter of shopping your deal and compare. When it comes to costs it can save you some money as the title and escrow is handled under the same service provider.