All Forum Posts by: Nicholas Devlin

Good goal! I can see why you'd want to do income route vs market value right now, bummer that it's a tough one to find! 

 No worries! If you don't mind me asking, what's your end goal with the refi of the portfolio?

Hey @Nicholas Devlin, I agree with @Andrew Garcia approach, but would consider the blanket loan option if you're looking to keep these properties long term. A couple of things to consider though about the commercial blanket.. 

1. On a blanket loan, the investor (lender) will appraise all the properties individually to get your total value, your LTV will depend on what those value's all come in at and if your portfolio cash flows (or debt services) positively. You may be required to show income and expense documentation for those rentals as well.

2. With blanket loans, all properties must stay under the umbrella of the loan for the entire time you have the loan. In other words, if you had 10 properties under the blanket, you could not sell one or refi one individually, you must refi the entire portfolio to remove that one from the blanket. If you are not sure if you want to keep all properties for that term, it may be worth keeping your individual loans on each of the properties so you're free to do with each property what you'd like. 

Hope this helps! 

Hi @Nicholas Devlin, it sounds like you want the properties to be valued based on cap rate rather than comps, correct?

If so, that could be tough because the value of any property is what someone is willing to pay for it. In commercial real estate, the purpose of the property is to generate income so those properties are valued based on such.

However, with SFHs, the main purpose is for people to live in. Since most people that purchase homes are purchasing them for personal use, not as an investment property, SFHs are valued based on what homebuyers will pay for it.

Therefore, a lender will have a hard time taking that approach when valuing the properties. With fears of a slight property value pullback looming and the lending landscape tightening, it is especially difficult. In 2020 or 2021 there might have been a lender out there.

With that being said, maybe if you use a portfolio or blanket loan, they will value it closer to a commercial portfolio of SFHs.

Hope this helps! Let me know if I can be of any assistance.

I'm not sure you would be able to go the commercial route just because these are single family homes - you could try a DSCR loan or something of the sort where you would qualify based on the rental revenue the home brings in each month

Try Lima One!

Been searching for a while now and have had no luck. Are there any $50-60k minimum loan amount lenders?

@Nicholas Devlin 

I have yet to find any legitimate lenders willing to do DSCR loans that small. MAYBE you could find a balance sheet lender who doesn't sell the notes that would do it. Still, very few and far between, if any at all.