Financing 5 condos

[David Gimenez]

Hello;

I have 5 units purchased in cash and I am looking to cash out to purchase more. The units are being transferred to individual LLC's. 4 of them are valued now at $90-100K while the 5 is a little more $110-$120K.

Was thinking of getting a hard money loan or ARM on the one with the higher valuation. Using the money to purchase a unit for $85K cash and paying it off in 2-2.5 years with the rental payments.

Any other options I should consider. 

I plan on keeping the units for the long haul

Thanks;

David

[Chris Martin]

The problem with fracture condo investments is the exit. If non-conforming (>50% investors), you can't sell OO because FNMA won't underwrite the loan. @Nick L. is correct about the valuation problem, although I'd say they are undervalued because they are impaired by non-conforming financing. The 'fix' is conversion, but that takes a lot of votes in favor of condo termination and a suitor willing to wait if you don't get full buy-in. FL is more favorable for newer fractured ownership with the 80% rule. Still, it's a hard sell.

Your 1 loan idea for condos across multiple developments, fractured ownership product, with small minority ownership... I can't see any commercial lender buying that idea. For your sake, I hope you can prove me wrong.