SFH First Time Rental Refinance

2 Replies

Looking for any and all advise.

Here's my situation:

I own 3 rental properties in TN.  All single family homes and each one has a remaining loan balance:


Rental 1: $ 44,000 (30 yr fixed: 5.25 %)

Rental 2: $ 57,000 (30 yr fixed: 4.75 %)

Rental 3: $ 63,500 (30 yr fixed: 5.25 %)


Rental 1: $ 108,000

Rental 2: $ 130,500

Rental 3: $ 158,000

I got the appraised value by taking the average of Realtor, Zillow, Redfin, Trulia and Realtytrac. I know not the absolute best way to get an appraised value, but I as hoping it was close enough to give me numbers to work with.

What I would like to do is refinance Rental 3 and use the extra money (approx. $55,000 leftover using a 75% LTV ratio) to pay off Rental 1 and whatever is left towards Rental 2. I would like to take advantage of the low interest rate environment and hopefully pay off one property without increasing my monthly payment too much as well as paying a ton in closing costs.

The issues and questions that I'm running into are:

1. Will I be able to get approved for this refinance at a lower rate

2. Does it make financial sense with the closing costs involved

I lived in Folsom for almost 20years. Sacramento has changed quite a bit.

I would suggest first calling your current lender and asking for a cash out refinance estimate including rates/fees. They may be easiest to work with since your information is already on file. Then call up a few lenders and get some loan estimates. You can find lenders on Zillow, etc. You might also want to consider a HELOC. Then compare. This will give you the most accurate view of current loan rates/fees based on your situation. You might find that rates are not much different than what you are currently at or maybe much lower. Some may charge points and others may not. Just compare.

Why do you want to pay off the 1st loan if you can use the funds as a downpayment to buy another investment property? If rates are low enough, you can refinance your other loans and repeat.

@Stanley Miller Another issue is that these are all low loan balances. You may not be able to find a bank to write a note on just one of them. However, if the numbers work, you may find a private lender (maybe even here) to carry the entire note for you personally. Then you can negotiate your own terms :)