Tricky Refinancing Question

[Ken Martin]

Hi BP community. I currently have one apartment building that has appreciated materially. I am negotiating financing on a second property in the same market. The new lender is recommending refinancing the first property (which I planned on doing anyway) by basically paying off my original mortgage, combining the two properties under a new loan / mortgage.

How should I be thinking about this? It seems like it would save me a decent amount of origination fees, etc. Does it prevent a future sale or 1031 of just one of the properties? Does it make my properties more vulnerable? I planned on using the 1st property at collateral for the second anyway. I just want to make sure I’m thinking about this the right way!