Bought a 24 unit complex 2 years ago Rehabbed and ready to BRRR

Multi-Family and Apartment Investing
7yFollow

Bought a 24 unit complex 2 years ago Rehabbed and ready to BRRR

Walter Ellis
Real Estate Investor · Lonoke, AR · Member since 2014 · 8 posts · 3 votes

Bought a 24 unit complex 2 years ago.  It had been foreclosed on and was empty and trashed.  Now it has been rehabbed and is at 90% plus occupancy.  Would like to refinance from local bank at variable rate to a permanent rate.  Should appraise in the $700K to $800K range and would like to do a cash out refinance so I can by my next multi-family property.  Any suggestions on where to start the process?

1Reply
16 views

18 Replies

Jump to latestLatest
  • Oleg Shalumov
    Rental Property Investor · Teaneck, NJ · Member since 2016 · 567 posts · 291 votes
    7y

    @Walter Ellis why don’t you open a “line of credit”? It is faster, cheaper and you will have access to more money.

    If that is an option, contact local banks or credit unions in the area. 

    0Reply
  • Johnoson Crutchfield
    Rental Property Investor · Tupelo, MS · Member since 2018 · 132 posts · 61 votes
    7y

    @Oleg Shalumov

    Are you suggesting he open a line to acquire other properties and then refi them?

    0Reply
  • Oleg Shalumov
    Rental Property Investor · Teaneck, NJ · Member since 2016 · 567 posts · 291 votes
    7y

    @Johnoson Crutchfield correct, he can use it to purchase the property or just put the down payment. The idea is the same as refinancing with taking some cash out, but a little bit different. It is almost like you are getting a credit card for the amount of available credit given against the property. You only pay % when you take out money to use. 

    0Reply
  • Johnoson Crutchfield
    Rental Property Investor · Tupelo, MS · Member since 2018 · 132 posts · 61 votes
    7y

    I’m about to try to do this on a property I’m renovating. I’ve got the seller carrying the note but I think the building is worth much more.  Thinking I can get a bank to give me a line on the property so I can go out and do more deals. 

    0Reply
  • Richard Sherman
    Rental Property Investor · Salem, OR · Member since 2017 · 696 posts · 660 votes
    7y

    @Walter Ellis I would start talking to local credit unions and local banks as well as a local broker who SPECIALIZES in commercial loans.  It is probably too small to do a agency loan but maybe not.

    0Reply
  • Bjorn AhlbladPro Member
    Investor · Shelton, WA · Member since 2017 · 6k+ posts · 6k+ votes
    7y

    @Walter Ellis Big congrats on bringing the building back to a productive life. @Oleg Shalumov has the right idea with the LOC. I got a LOC on a property a while back but can't find anything worthwhile to spend it on. I only invest in my immediate area and there are no MF's around worth buying at the moment-so I am biding my time. Meanwhile the LOC costs nothing.

    0Reply
  • Walter Ellis
    OP
    Real Estate Investor · Lonoke, AR · Member since 2014 · 8 posts · 3 votes
    7y

    @Oleg Shalumov thanks for the tip, I had not considered that option but that is a great idea.

    0Reply
  • Walter Ellis
    OP
    Real Estate Investor · Lonoke, AR · Member since 2014 · 8 posts · 3 votes
    7y

    @Bjorn Ahlblad we are in the same boat, nothing on my radar currently but I want to have capital available when I do locate the next property. This LOC option sounds like a great option and I will be pursuing it further.

    0Reply
  • Henri Meli
    Investor · Morrisville, NC · Member since 2012 · 1k+ posts · 673 votes
    7y

    @Walter Ellis ... Just reach out to lenders. Start locally, as the lenders will be able to quickly assess the asset. 

    Congrats on performing value-add and Good Luck.

    0Reply
  • Alina Trigub
    Rental Property Investor · Glen Rock, NJ · Member since 2015 · 3k+ posts · 2k+ votes
    7y

    @Walter Ellis

    Congrats on the successful plan execution with your property! In addition to refi and HELOC, consider if 1031 works for you. You can sell this property and put the gains towards the down-payment of a larger one and defer your gains this way.

    0Reply
  • Fred Shatzoff
    Lender · Member since 2019 · 604 posts · 160 votes
    7y

    @Walter Ellis I am a lender can get you a 30 year fixed no doc loan 75% ltv cash out refined. We can close in 30 days.

    0Reply
  • Walter Ellis
    OP
    Real Estate Investor · Lonoke, AR · Member since 2014 · 8 posts · 3 votes
    7y

    @Henri Meli

    We have reached out to lenders but we haven’t found anyone willing to lock in a rate, it’s all been variable rate. I was hoping to get a locked in rate so that if interest rates keep going up, I don’t continue to have my payment go up.

    0Reply
  • Walter Ellis
    OP
    Real Estate Investor · Lonoke, AR · Member since 2014 · 8 posts · 3 votes
    7y

    @Alina Trigub

    1031 is something we have considered and are still considering. This property is not in a great area, it’s a C market, small town type area. I worry that we will have a hard time selling it where it’s at. I know the numbers will justify a good appraisal, but getting someone to pay that might be a different story. I am new to this though, I could be wrong.

    0Reply
  • Chris C.
    Raleigh, NC · Member since 2017 · 347 posts · 94 votes
    7y

    @Walter Ellis

    Start calling up local banks.

    0Reply
  • Raheem Jenkins
    Rental Property Investor · Raleigh, NC · Member since 2018 · 28 posts · 5 votes
    7y

    @Walter Ellis I agree with everyone else. Call your local banks for sure.

    0Reply
  • Alina Trigub
    Rental Property Investor · Glen Rock, NJ · Member since 2015 · 3k+ posts · 2k+ votes
    7y
    Walter,
    Why don't you talk to a broker or better yet, put the property on the market and see what happens. 


    Originally posted by @Walter Ellis:

    @Alina Trigub

    1031 is something we have considered and are still considering. This property is not in a great area, it’s a C market, small town type area. I worry that we will have a hard time selling it where it’s at. I know the numbers will justify a good appraisal, but getting someone to pay that might be a different story. I am new to this though, I could be wrong.

    0Reply
  • Jared RineBusiness Member
    Lender · Sacramento, CA · Member since 2009 · 1k+ posts · 277 votes
    7y

    @Walter Ellis..you state you're looking for a fixed rate loan, but that doesn't mean anything not knowing what type of term you're looking for.  Fixed rate financing should be available, but are you looking for fully amortized loan options or are you okay with what most banking is going to be - 5-10 year money on 25-30 year ams, fixed rate for loan term.  I'm unclear.  Location does matter, but there still should be lending options for you.  But some of it is going to be based on expectation and what is available in the capital markets.  What are you looking for?  and what are your main kickers?  

    That might help you get some better answers.  I might even have some options, but I need to know how to direct.  Pm if you want.

    Thanks

    Jared Rine United Lending Partners53 Reviews
    View Page
    0Reply
  • Daniel Federico
    Lender · Irvine, CA · Member since 2018 · 53 posts · 8 votes
    7y

    @Walter Ellis

    Walter,

    Have you looked into portfolio lenders to refi this 24-unit complex?

    0Reply
Join the conversationCreate a free account to reply, vote on answers and follow this thread.
Log InJoin for Free