Long Term Financing for Seasoned Cash Deals

[Braden B.]

Hello to all the experts on BP.  Thanks for your willingness to help a fellow investor navigate a financing issue that has recently popped up for me. Apologies for the lengthy post, but the details are a bit involved. 

I am in the process of attempting to finance three of my rentals in Charlotte, NC which I acquired over the last 12-18 months using cash. Now that they are refreshed and rented, I'd like to recapture 70-75% of their individual values and continue the BRRRR process with other properties.

My dilemma:  The bank with whom I normally work is telling me that they will not allow me to have more than 4 mortgages in total (which includes my primary residence).  I understood that the FNMA guidelines allowed up to 10 mortgages but my bank says they only allow 4.

I have other mortgage broker contacts who indicated that the other issue is that these three properties are condos and banks hate to do "cash out" refi's on condos especially sub-$130,000 deals (which all of these are).  My point is that these are unlevered, are rented, and I am simply attempting to inject some liquidity into the business for other cash flowing deals. 

I really hate to cross collateralize these and go through a commercial product since the rate will stink and more than likely have a balloon in 5-7 years. However, if I have to go that route, I suppose it beats having the $200K+ illiquid perpetually. 

I would love recommendations for banks or brokers in the Charlotte market who understand the BRRRR concept, can analyze a balance sheet, and would welcome the opportunity to work with an investor with great credit/reserves looking to build a long term relationship.

Thanks in advance for your suggestions. 

[Jesse Gonzalez]

I don't know any brokers in your area, but you are correct per the multiple financed property question.  Also, just because the units are condos does not preclude you from performing a cash out refinance.  Just keep looking for a broker that is willing to put in the leg work.  Ask them if they have lenders that underwrite to fannie mae guidelines with no additional overlays.  That's the type of lender you will need.  

Applying the Multiple Financed Property Policy to DU Loan Casefiles

If the borrower is financing a second home or investment property that is underwritten through DU(Fannie Mae underwriting engine), the maximum number of financed properties the borrower can have is ten. If the borrower will have one to six financed properties, Fannie Mae's standard eligibility policies apply (for example, LTV ratios and minimum credit scores).