Refinance cash out to grow

[Ronald Cooperman]

My partner and I are splitting our portfolio of SFR in New Jersey very amicably. We currently own approximately 60 SFR. All tenant occupied

I will own 31 properties valued at 4,000,000. Financed at 1,700,000. 

My credit score is 625.

I am 65 and looking to grow portfolio for kids, etc. 

I use outside property management 

I am looking to refi and cash out some cash to grow.  

I am looking to cash out refinance 70-75% of LTV at 25-30 year amortization.

Any suggestions?

thanks, and have a good day

Ron

[Matthew Crivelli]

Hi Ronald, 

You could do a portfolio loan. This is where you group a large number of properties into what is called a "blanket loan". You would have an appraisal done on each property and you would get 60% - 75% of the total As- Is value of your entire portfolio. You pay off the old notes, and what's left over is cash for you to use how you please. 

30y fixed products are available on the private side of lending for this exact purpose. 

The biggest issue I see you having is your credit score. 620 will be to low for most. The good news is, with a DSCR loan you are refinancing into an LLC. This allows you to bring on a partner. If this partner (or family member) had better credit, say 700+, you would have access to that 70% - 75% LTV cash-out.

There are other hoops to jump through as well, the total rents have to be higher than the monthly payment (PITI) of your new loan, sometimes the max LTV we can give you can be restricted because of lack of cash flow. Also, the properties need to be in areas that have comparable sales data and market rent comps too, properties cannot be rural.

I hope this sheds some light on how a DSCR loans work! If your properties fit "the box", a commercial refi into an LLC can be the way to go!