Refi all Residential Loans? Keep and then go Commercial? BRRRR+10

[Nat Rojas]

BLUF (Bottom Line Up Front): Using BRRRR, for Properties 11 and greater, what is the best strategy to refinance out of Hard money / Private lending?

I utilize the BRRRR strategy and will shortly be at 10 residential loans under my name.

I've heard rumors and conversations, but don't have the black and white and full understanding. Hopefully you could help me out or point me in the right direction?

Hypothetically speaking, an ideal candidate provides a portfolio lender with 10 properties (currently all with Residential Loans) and requests to refinance under one or different blanket loan(s). All the properties meet the criteria for commercial refi.

Does this mean that the ideal candidate in this hypothetical has essentially 0 residential loans under his name? My understanding is that the commercial loan is under an LLC which removes the debt from the personal credit report?

If so, the process is:

1. Buy distressed property with Private Financing
2. Refi with residential loan
3. Get 10 rentals with residential loans
4. Refinance them under 1 or more blanket loan(s)
5. Repeat at #1

Or, the process is:

1. Buy distressed property with Private Financing
2. Refi with residential loan
3. Get 10 rentals with residential loans
4. Buy distressed property with Private Financing
5. Refi with commercial loan (Ideally 30 fixed, if possible. Understand they’re unicorns)
6. Repeat at #4

I’ve been reaching out and speaking with different Mortgage brokers and commercial Lenders. After scouring BP, it seems like the Broker route is the way to go?

Also, I understand COVID-19 has changed current lending. I’m just planning for the future

Attempted to provide high level info with just enough detail to start the conversation. What other info do you need from me?

Any assistance, advice, opinion, or recommendation is greatly appreciated!