Can I borrow against a portfolio of second position mortgages

[Chris Anderson]

My wife owns a portfolio of 2nd position mortgages we are looking to leverage.  Here is the story:

We sold a portfolio of rentals to a single buyer and part of the deal is we held back a 10% mortgage.  He still put down 15% on top of the 1st and 2nd position mortgages.  So initially there was at lease 15% equity and on some the appraisals came back higher so there is even more equity.  Two years has passed and all the properties are worth even more now.  

We have several business and are looking to borrow against these mortgages.  The portfolio has a face value of around $800k.  We would like to use it as collateral for a loan of about $250k.  Does anyone know a lender who would do this.  The payments from the mortgage would cover a loan of this size as 12% interest.  

thoughts?  Know anyone who might be able to help?

Chris

 

[Dave Van Horn]

In this scenario it's probably easier to do a collateral assignment of note and mortgage than trying to find a lender for a portfolio that size.

[Jay Hinrichs]

Quote from @Dave Van Horn:

In this scenario it's probably easier to do a collateral assignment of note and mortgage than trying to find a lender for a portfolio that size.

Dave I dont know about these folks but I know my community bank would look at this. At least a bank that you have your relationship with and super strong deposits  and could probably hypothicate them and get a under 10% rate.. just musing.. I used to do this on my timber deals.

[Chris Seveney]

Quote from @Chris Anderson:

My wife owns a portfolio of 2nd position mortgages we are looking to leverage.  Here is the story:

We sold a portfolio of rentals to a single buyer and part of the deal is we held back a 10% mortgage.  He still put down 15% on top of the 1st and 2nd position mortgages.  So initially there was at lease 15% equity and on some the appraisals came back higher so there is even more equity.  Two years has passed and all the properties are worth even more now.  

We have several business and are looking to borrow against these mortgages.  The portfolio has a face value of around $800k.  We would like to use it as collateral for a loan of about $250k.  Does anyone know a lender who would do this.  The payments from the mortgage would cover a loan of this size as 12% interest.  

thoughts?  Know anyone who might be able to help?

Chris

 

 I would try some local commercial lenders. I think you would have a better shot selling the loans than getting a collateral assignment against them. We have spoke to banks in the past and its challenging to find ones that will do a C/A on a first but the ones that would consider it would not do it on a 2nd. Dave above has done a ton in 2nds space so he may have some further insights.

[Chad U.]

Quote from @Chris Anderson:

My wife owns a portfolio of 2nd position mortgages we are looking to leverage.  Here is the story:

We sold a portfolio of rentals to a single buyer and part of the deal is we held back a 10% mortgage.  He still put down 15% on top of the 1st and 2nd position mortgages.  So initially there was at lease 15% equity and on some the appraisals came back higher so there is even more equity.  Two years has passed and all the properties are worth even more now.  

We have several business and are looking to borrow against these mortgages.  The portfolio has a face value of around $800k.  We would like to use it as collateral for a loan of about $250k.  Does anyone know a lender who would do this.  The payments from the mortgage would cover a loan of this size as 12% interest.  

thoughts?  Know anyone who might be able to help?

Chris

 

Try Western Alliance Bank.  They seem to do a lot of rehypothetication loans for many funds that I buy loans from. 

[Chris Seveney]

@Chad U.

$25M min and won’t do seconds. We have spoken with them and pretty strict covenants as well as Axos bank

[Chris Anderson]

Quick update so far no luck...I have one possible lender.  So working on it still