California Multi-Family Cash-Out Refi - Which banks?

11 Replies

We have a duplex in Northern California that we want to do a cash-out refi. As with all our decisions, we try to go local however the only banks based in that county will not do a cash-out refi on a duplex unless we live in it (which we do not.) We have been working with a mortgage broker but as we often find, are less than happy with their level of service.

We would like to work directly with a bank that does cash-out refi's on a non-owner occupied duplex.  Any suggestions?  It doesn't have to be a California bank so long as they lend in California.

Thanks in advance.  (I did a search on this topic but did not find something this specific.)

Updated about 1 month ago

**The property is in Ukiah, Mendocino County. I have tried all the local banks and they either won't lend on it or the rate is significantly more than what we are already paying. (We purchased it as an owner-occupied a few years ago so are paying 4.125%)

Updated about 1 month ago

*I think it would be more accurate for me to say that we prefer working directly with a lender instead of a mortgage broker because when we've done that in the past, we find that there are less surprises. We are actually good friends with our current mortgage broker, however unexpected things keep popping up, I think because he couldn't possibly know everything that every lender might want. Conversely, when we've dealt directly with the lender (albeit usually through a small local bank), the lending officer knows exactly what is needed and we experience no surprises.

@Houston Porter ..where in Northern CA? Not to step on toes, but maybe you just need a better mortgage broker. I feel like there was a blanket feel on your posting that because you've had bad service, that we're ALL like that and I can assure you that we're not. Investment cash-out refinances are tough to do right now, no matter the lender, whether bank or broker, and so maybe it's knowing where to go vs. the actual service. I'm just giving you food for thought, as I work with many different investors. Just my $0.02. Pm if you want. Thanks

@Houston Porter   Welcome! Where in Northern California? If Chico to Redding or Sac try Sierra Central Credit Union or Try Counties Bank. Try Counties has a better rate but compare the two. Check with local Credit Unions. There is a lady who posts on here Kerri Baird? She lists several banks etc that lend. Her post appears regularly so keep searching. Good luck and keep us posted.

@Houston Porter I agree that you should be able to find a loan for this. Banks are slowing down on MultiFam Loans but some are. If you’re considering hard money, I might be able to help. I’m doing a cash out refi on duplex right now for another client. Rates are certainly not bank rates though. I’d be happy to chat further if interested.

Jared - Fair enough.  I have amended my original post to explain a little more.  As mentioned, we are actually close friends with our regular mortgage broker but feel like when we deal directly with a lender, there are less surprises than when he is shopping around for the lowest rate and then possibly dealing with a lender he hasn't dealt with before.  We'd rather pay a slightly higher rate but get straight through the process then get a slightly lower rate but keep running into hurdles. 

Case in point - we recently purchased a duplex through the local bank in the town it is located.  It was a flat-fee loan (at $250) and the loan officer knew exactly what he needed from us and how long it would take to get approval.  (He even let us pick our down-payment because the appraisal was well over the purchase price.  We ended up being able to put down just 10%.  (He also knew the property, which certainly isn't the norm, but helped the process along.)) Conversely, we have been trying to cash-out refi a property in a strong rental market through our mortgage broker and it has been a headache.  We have almost $200K in equity and not only are hey only offering us $45K of cash-out, but the process has been filled with surprises the whole way.  And if we have to supply our bank statements and business P&L one more time, my accountant is going to kill me.

Over the years, we've used four different mortgage brokers, all with years of experience, and several banks directly.  I feel like the loan officer at the banks knew exactly what was needed, whereas the loan brokers were at the whim of the lender and whatever procedures they had in place.  Understandably, the loan officer at a single bank only deals with his/her loans, so knows exactly what his clients will need, what they will qualify for, and how long the process should take.  Mortgage brokers are at a serious disadvantage in that regard.  And at this point, saving a little bit of interest isn't worth the hassle to us.


Originally posted by @Jared Rine :

@Houston Porter..where in Northern CA?  Not to step on toes, but maybe you just need a better mortgage broker. I feel like there was a blanket feel on your posting that because you've had bad service, that we're ALL like that and I can assure you that we're not.  Investment cash-out refinances are tough to do right now, no matter the lender, whether bank or broker, and so maybe it's knowing where to go vs. the actual service.  I'm just giving you food for thought, as I work with many different investors.  Just my $0.02.  Pm if you want.  Thanks


 

Thanks - I appreciate the offer but we've already got a good interest rate and planning on holding and paying this one off, so are not looking to go the hard money route.  But I'll keep your name on file in case we run into a situation more suited for that.  Do you mind sharing what your terms are for loans of $50K or less?

Originally posted by @Ben Stoodley :

@Houston Porter I agree that you should be able to find a loan for this. Banks are slowing down on MultiFam Loans but some are. If you’re considering hard money, I might be able to help. I’m doing a cash out refi on duplex right now for another client. Rates are certainly not bank rates though. I’d be happy to chat further if interested.

 

Thanks for tagging me, @Dylan Vargas ~

I have been building a resource of HELOC lenders from people on BP. Those folks have found success in the past on securing HELOCs for investment property...about as rare as hens' teeth.

That said, and more to the point of this thread, I have invested in several States, and have used Caeli Ridge from Ridge Lending for a number of my investment properties.


@Houston Porter , have you tried Redwood Capital bank out of Eureka? Not quite Ukiah, but much more small-town service-oriented than anyone in Sacramento or even Chico/Redding. Coast Central Credit Union may be another good choice. I know a good small capital group in Redding if that's the contact info you'd be interested in.