All Forum Posts by: Jacob Silvermetz

We own 10 properties free-and-clear in Cleveland Ohio, and we would like to do a Fannie/Freddie cash-out refinance on all 10 at once.

The properties are a mix of single and multi-family homes, totalling 21 rental units, and the seasoning period comes to an end in mid-september. We have 2 Properties, totalling 5 rental units, that we may want to sell in the next 3-5 months.

How can we optimize the value of the cash-out Refi? What risks do you foresee with this process?

Thank you for your guidance.

Updates: 

Lima One capital only provides loans portfolios where the properties are each valued above $60,000.  I spoke to 4 additional portfolio lenders and they all had minimums above that ($75,000 - $100,000 per property). No go.

Fifth Third bank has purchased MB Financial. I called, and they easily connected me to a mortgage specialist, Chaz.  They can do the cash-out refi loans if I put the loans in my personal name. Details are below.  

A mortgage specialist at Huntington Bank also expressed willingness to execute the loans provided that they were made in my personal name. 

Details from the call with Fifth Third: 

For a standard cash-out refinance:

• Minimum property value (not loan amount, I double-checked in the call) is about $20,000.
• Total Closing costs $2500-$3500
• Up to 30 year fixed.
• Valuation based primarily on appraiser, not comps. Around $500 per appraisal. $395 up front for all closing costs, even if the loan cannot be completed.
• Bank takes $1120 in closing costs

For a single-family home:

•  Interest rate of 5.21% If using auto bill pay 
• 75% LTV

Multi-Unit 

• Interest rate closer to 5.6%.
• 70% LTV

Different program: "Easy home refinance". 

• Lower closing costs of $399 with higher interest rates; need to call a different specialist, Michelle for details.
• Up to 30 year fixed.
• 75-80% of cash out depending upon units and valuation.

Amazing answer.  Appreciate the thoroughness.  Will post more as details emerge. 

@James Wise, you misunderstood my message. Estimated ARV is $360,000 on the portfolio after reno and full occupancy. The cost of renovation before refi is between 50-60k.

Would want a cash-out refinance for $250,000 on portfolio, or as low as $25,000 per house.

Attainable?

Last month, I purchased a portfolio of 10 low-income houses with 21 rental units in Cleveland Ohio, in one blanket purchase agreement for $250,000. After renovations of between $50,000-$60,000 the ARV is conservatively estimated at $360,000. the purchase and ongoing renovations were financed using private loans, unsecured bank loans, and some personal cash, so the houses were purchased without any liens/mortgages.

I plan to perform a cash-out refinance on all properties within 14 months of owning them, using either a portfolio lender or multiple residential loans. I have seen MB Finance listed as a potential lender for as low as $25,000 at 75% LTV, which could work for my needs, and I wonder how their terms look.

Can you share previous experiences with lenders that support cash-out refinance loans around $25,000-$30,000 in Cleveland Ohio?

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For reference, the following 10 addresses are near to the 10 purchased properties. Identifying a conservative and reasonable ARV has been tricky, so perspectives are welcomed on the $360,000:

Thank you very much.