Putting Multiple Properties Under One Note

[Ralph R.]

I own several properties that I have acquired over the past several Years.   I have a pretty good amount of equity in some of them and am thinking of pulling some of the equity out and either paying off a property or possibly purchasing another property.  My idea is to combine two of the properties into a single note.  I have already spoken to a couple lenders about this and they do provide this type of financing.  I am aware that this could complicate selling the properties singly as the note for both would need to be cleared to release the single property.  The refinancing costs are reduced a little bit to Refi this way and terms of the notes are the same for one or two properties.  I would try to keep somewhere around 30-35% equity, also keep in mind  I am nearing retirement.  I am looking for Pro's, Con's, and maybe other ideas??   

[Jay Hinrichs]

this is generally quite simple.. just negotiate a release clasue in the new financing.  this is how we do subdivisions. one big loan lets say encumbering 30 lots.. we have a release provision where the cash payment of say 100k releases a lot.. and sometimes the banks want accelerated pay down like on the one I have going now.. 27 homes.. the release on the lots is 80k even though I am only in them 60 k.. so the last 12 or so are free and clear.

so lets say you borrow 200k and the properties or worth the same.. you would have a release for 100k.. or you may have a release for 110 or 120k there by having a bit more equity in one.

local commercial banks can handle this easy.. larger banks it may be a little more negotiation since its not vanilla lending.