How Should I Finance This Deal? 2x SFH

[Michael Glaser]

It's been over a year since I've had an offer accepted. I found that I was being way too conservative with my offers on SFH's that still made sense by the numbers. Stuck in prices of the past that many of us find ourselves in. Painfully going through old offers that would've been great deals if I had only gone in at asking 18 months ago, but I digress...

I was in KC last week and looked at a lot of property that would work. My first two offers were accepted and I'm now spinning my wheels trying to figure out the best way to finance them both.

April 2016:

I have 1x SFH on a 30yr fixed that I don't want to touch at 5.125%. 20% down. LTV 68%

January 2017:

I have 4x SFH on a commercial at 5.25 on a 5yr note, amortized 20yr. 20% down. LTV 56%

Both houses' offers are $90K total. I more than have the $18K or 20% down.

I have anywhere from $40K-$60K in equity, conservatively as I bought the 4 below market value. 

What's the best way to leverage this without putting my cash on the table? I have other deals I'd like to use my cash for, but I don't know the best way to leverage the equity I already have. Do I shop banks with all 5? Do I shop with the 4? 

Looking to close on both properties by mid-May so time is of the essence. 

[Jason D.]

What about refinancing the 4 to 30 year notes and pulling equity out? you may pay slightly more interest but drawn out over an additional 10 years, they'll likely still cashflow better. Any pre-payment penalties on that loan? That would have to be factored in as well....