Refinancing after stabilizing

[Ben Rishwain]

Good evening! I purchased a 10-unit complex in California with a hard money loan. I have since stabilized the property and am interested in getting a longer term loan on the property. Does anybody know how long the property needs to be ‘seasoned’ in it’s stabilized condition (meaning current incomes) before you go to a bank for a refi? Do I need 12-months of stabilized rents, 6-months or will the simple fact that rents are at the new rate be adequate to get a full value for the property?

[Geordy Rostad]

@Ben Rishwain

Different lenders will have different rules but I think the property usually starts seasoning from the day you close the purchase, not from when it is stabilized. If you have a fist full of new 1-year leases with higher rents than before, you should be in good shape.

You should be reaching out to all of the nearby regional bank branches and credit unions. Ask them all about their programs and they will tell you their criteria. You should be able to get all the information you need before you even have to submit your personal financial statement. You've got one of those already, right? If not, you should get started on that right away. You'll need it for a commercial loan.