Question about cash out refinancing

[Corey Crowley]

I am new to Bigger Pockets and this is my first post, so I apologize if these questions may seem very basic to some.

I own 7 single family homes and 2 duplexes which are all paid and have no outstanding loans. I have not purchased a property in a few years, but I am closing on a new single-family house this Friday that I am paying cash for. I am thinking about actively trying to grow my investment portfolio and use my existing properties as leverage to acquire more properties. I have a couple of questions about ownership structure and a couple about possible cash out finance options for my existing properties.

Right now, all of these homes are in personal name, and I realize how much of a mistake this is and I plan to move them into LLC's before the end of 2024. If I am about to search for some kind of cash out refinancing options, is it best to keep the properties in my personal name for now or should I move them into LLC's before searching for financing options?

My next question is about financing options. If I am looking to pull money out of a total of 10 properties to make new investments, what are the options here? Are there loans that I can take out against the entire 10 property portfolio, or do people usually get a single loan per property? If these are both options what are the pros and cons to each of these financing options?

Any advice or personal experience that you can share would be greatly appreciated.

Corey

[Jason Taken]

Hi there,

Great question about financing options for your properties!

If you're looking to pull money out of 10 properties to make new investments, you have a couple of financing options to consider.

### Option 1: Single Loan Per Property

- **Pros**: Each property's loan is separate, so if one property has issues, it won't affect the others. This can also make it easier to manage and keep track of each loan.

- **Cons**: You'll have to deal with multiple loan applications, closing costs, and monthly payments, which can be more complicated and expensive.

### Option 2: Portfolio Loan

- **Pros**: A portfolio loan allows you to use multiple properties as collateral for a single loan. This can simplify your finances and potentially offer better terms since the lender has more collateral.

- **Cons**: If one property in the portfolio has issues, it could affect the entire loan. You'll also need to find a lender that offers portfolio loans, which might be less common.

### Other Considerations

- **HELOCs (Home Equity Lines of Credit)**: You can take out a HELOC on each property or on a few properties to pull out equity. This is like a credit card but tied to your property's equity.

- **Cash-Out Refinance**: You can refinance each property to pull out cash, but this involves new loan terms and closing costs for each property.

### Steps to Take

- **Research Lenders**: Look for lenders that specialize in real estate investors and offer portfolio loans or multiple HELOCs. (We personally do portfolio and single property loans and will be adding a HELOC product soon!)

Feel free to reach out if you need more specific guidance or have more questions Good luck with your investments.