Property Manager · Livonia, MI · Member since 2011 · 4k+ posts · 1k+ votes
want to do a cash out refi on a home i purchased 1 year ago and put that money into a new purchase.
contacted 5-6 different banks/lending institutions and noone can do it.
they tell me:
"just got off the phone with Fannie Mae. They have made changes to their Multiple Properties program. They no longer allow cash out. On conventional loans, lenders have a 4 financed property maximum. It has always been applied only to a purchase, which is where Flagstar came in with their special program. But now lenders will not allow refinances of a rental property if it’s one of 4 or more already owned. Refinancing a primary residence is never an issue regardless of how many properties you own."
On this page you can specify criteria. I'll put in Colorado for the state and leave "Sort by" set to "Total Assets". I want to look for smaller banks. Click "Find"
That gets me a list of banks, largest to smallest. The first column I see is "Cert" and has a number. Those are clickable links, so click one.
Now I see a screen that has a blue band across the middle with "Information Gateway". Below that is "ID Report Selections:". I choose Assets and Liabilities - % Assets. This will show me percentages. Choose "Assets and Liabilities" to see actual numbers. Now click "Generate Report" over to the right.
This generates a balance sheet for the bank. Item 6 (number may vary, I saw 6 on the couple I checked) is "Net loans & leases". That's a clickable link. Click it.
This generates a listing of the bank's loan and lease assets. A bank considers a loan to be an asset. This will break out the types of loans the bank has made. Look for a bank that is making the type of loans you want. You should see two columns of numbers. I see Dec 2012 and Dec 2011. If the number is increasing for the type of loan you want, all the better.
Sorry, I know it would be easier to search for "show me banks in my area that are making investor real estate loans", but its not that simple. Back on the very first search screen, there is an criteria called "Asset Concentration Hierarchy" and one of the choices is Mortgage Lending Specialization. You might try that to narrow down the choices.
Real Estate Investor · Outstate, MN · Member since 2009 · 25 posts · 13 votes
13y
Stop asking big banks. Go to local, community banks and credit unions, esp. the ones that have business loans and accounts. Look for the ones that hold their loans in house, not sell them to Fannie. Then you're not bound by the Fannie rules. I have nearly 20 financed properties (8 with one credit union) and no one's every mentioned a limit. I've had them refi for me as quickly as one month after purchase, too, at appraised value of twice what I paid. Just don't borrow so much that you hinder your cash flow.
Investor · Williamson, NY · Member since 2013 · 21 posts · 2 votes
13y
I assume he was refering to "banks in your community" or nearby, smaller banks. I've had luck with this myself. The larger banks tend to have a more "mechanical" system where you have to check all their boxes to get a loan, while smaller local banks can be more willing to working with you on a case by case basis.
On this page you can specify criteria. I'll put in Colorado for the state and leave "Sort by" set to "Total Assets". I want to look for smaller banks. Click "Find"
That gets me a list of banks, largest to smallest. The first column I see is "Cert" and has a number. Those are clickable links, so click one.
Now I see a screen that has a blue band across the middle with "Information Gateway". Below that is "ID Report Selections:". I choose Assets and Liabilities - % Assets. This will show me percentages. Choose "Assets and Liabilities" to see actual numbers. Now click "Generate Report" over to the right.
This generates a balance sheet for the bank. Item 6 (number may vary, I saw 6 on the couple I checked) is "Net loans & leases". That's a clickable link. Click it.
This generates a listing of the bank's loan and lease assets. A bank considers a loan to be an asset. This will break out the types of loans the bank has made. Look for a bank that is making the type of loans you want. You should see two columns of numbers. I see Dec 2012 and Dec 2011. If the number is increasing for the type of loan you want, all the better.
Sorry, I know it would be easier to search for "show me banks in my area that are making investor real estate loans", but its not that simple. Back on the very first search screen, there is an criteria called "Asset Concentration Hierarchy" and one of the choices is Mortgage Lending Specialization. You might try that to narrow down the choices.
Investor · Cincinnati, OH · Member since 2010 · 1k+ posts · 928 votes
13y
Remember, you're looking for local/regional banks and credit unions that have in-house (portfolio) lending programs for residential investment property (1-4 units). These are loans the bank/CU keeps on its books. You need to be specific when you call as to what you're looking for, so that you don't end up just talking to a secondary market lender at the bank, or you will get the same answer (ie. Fannie/Freddie do not allow cash-out refi's on loans 5-10, that is a fact). These in-house loans will be more like a 5 year balloon note, or a 10 year amortizing note, or a 5/1 ARM, and the rate will be 1-3 points higher than conventional.
I'm curious if it's possible to get a cash-out portfolio loan through a local bank, then refinance out 1 year later to a conventional loan as a no-cash-out refi (which IS permitted for loans 5-10). I somewhat doubt it, since they may trace back to verify that you've had continuous financing since the purchase date.
Investor · Willow Spring, NC · Member since 2009 · 5k+ posts · 3k+ votes
13y
Originally posted by George P.:
i just spent over 2 hrs calling 8 credit unions and noone can do it. most of them are clueless as to what i was even talking about.
will update, but i guess most of my lunch hour will be spent calling places trying to see if they could do it..
Cheap government sponsored loans are for inexperienced investors, less than 4 (or so...) properties. After that, it's market rates. See also Financing for more than 4 loans recently posted.
Investor · Cincinnati, OH · Member since 2010 · 1k+ posts · 928 votes
13y
Originally posted by George P.:
i just spent over 2 hrs calling 8 credit unions and noone can do it. most of them are clueless as to what i was even talking about.
I would not focus on credit unions. Call your local banks, some might be called savings banks in your area. These guys are usually under 2bn in total assets, oftentimes much smaller than that. Use the FDIC queries Jon linked, not difficult. Network with other buy & hold investors that own alot of property, see what they're doing to finance.
Property Manager · Livonia, MI · Member since 2011 · 4k+ posts · 1k+ votes
13y
jon,
i called them yesterday and spoke to them. the guy is checking and will let me know. i am hoping that he will have some good news for me since i want to refi as soon as i can.
mark, i checked on google and nothing came up but some conversations on zillow about that topic.
let me PM you to see what you found that i could not.
Investor · Reston, VA · Member since 2011 · 683 posts · 191 votes
13y
Portfolio lenders are usually small local banks. I'd use the yellow pages or a referral. I happen to drive by several of them on a regular basis. I have it so easy with the Regional that I have been using for 25yrs - no application, quick close, etc., that I haven't gone looking for other financing.
What upsets me is that I am limited to 5yr $$. I'm lucky that I have some older loans that I refied in 2004 when it was painless (5 minutes on the phone and I was approved). All rate and term though, no cash-out. I cashed-out on my personal but was told last year that the 10 mortgaged properties applied to my personal home(?). Has this changed?
One thing that I have been kicking around for the past couple of years is transferring a number of smaller mortages to paid-off property to get the number under ten. My portfolio lender is on-board and I told him that I would execute a blanket trust, if he wanted, after the refi's.
Investor · Cincinnati, OH · Member since 2010 · 1k+ posts · 928 votes
13y
George, run Jon's FDIC query for MI. There are 124 banks with assets of 2.3bn or less. Scan the list for those in your area and start calling. Report back with the results. I wouldn't rely on a web search for portfolio lenders. These smaller banks typically only lend within their immediate market footprint.
I made a lot of these calls a couple of years ago, and used this worksheet to track the info. Use something like this to try and get all the info in one call, otherwise you'll just get frustrated from having to call back repeatedly to get additional information.
Investor · Oak Park, MI · Member since 2014 · 299 posts · 47 votes
11y
@George P. I'm in a similar situation now, were you able to find a good lender? I have 1 rental paid off, would love to get some money out to buy another property. Thanks.
Property Manager · Livonia, MI · Member since 2011 · 4k+ posts · 1k+ votes
11y
lots of banks are doing it now a days.. try "the mortgage center" in Southfield. they did ours. also try "independent bank". . if not let me know and I will get u more names.
Real Estate Agent · Southington, CT · Member since 2008 · 5k+ posts · 3k+ votes
11y
Start by calling every single bank in your area and do not stop until you get a bank that will do it. I know it sounds like a lot of work, but that is the way a lot of us have done it.
Start by calling every single bank in your area and do not stop until you get a bank that will do it. I know it sounds like a lot of work, but that is the way a lot of us have done it.
you are correct. i called around 53 or 56 different places until i found independent bank. took a lot of time.