Refinancing single family rental portfolio

[Pete Abilla]

Suppose I own a medium sized single family rental portfolio and I’ll be ready to refinance it in 2 years. 

I’m hearing conflicting reports:

1- refinancing a single family rental portfolio will follow the retail comparables approach requiring comps on each unit

OR

2- refinancing a single family rental portfolio will follow the NOI/Cap Rate valuation model like multifamily.

I’d love to hear from commercial bankers and/or others who have refinances single family rentals. Thanks much.

[Greg Kasmer]

Pete - I've refinanced a few (3) single families at a time and the lender used a comparable approach, but not sure if that would have changed if I would have had others to refinance (I was comfortable with the mortgage on my other properties). I think the most accurate way to determine the approach would be to ask your lender based on your specific situation - number of properties, etc... My thought is that when you refinance 5+ properties (multifamily size) that may trigger more of an NOI/Cap rate approach with a lender. Good Luck!