Lots of Equity, but can't refi?

[Steve Sprowls]

I have 5 single family rental properties, all in the northeast part of Ft Worth, Tarrant County, TX. I bought number 5 this past summer, but the other 4 I've owned for several years. As are result, I have about 50% equity across all 5 properties (approx $300k). They are all traditional 30 year mortgages. I would love to use this equity to get involved in small apartment complexes. However, my mortgage broker said I can't refi them for an equity pull because of Fannie Mae restrictions. She said I could refi them into a commercial loan, but I think my cash flow would greatly suffer because of a shorter amortization timeframe. Thoughts? I've also heard that I could use the equity as collateral towards the purchase of a small apartment complex. Has anyone done this that can give more details? I don't want to sell these houses because they all cash flow at least $300-450/month.

[Chris Mason]

@Steve Sprowls, your current mortgage guy is correct that Fannie Mae will not allow this.

Maybe you should find a mortgage guy that also offers Freddie Mac products? :)

Freddie will let you cash out with up to six financed properties.