Questions From A Novice.
I have 6 duplexes with an LTV of around 70% on each. 4 have good interest rates while the last 2 are around 8.125%. I am needing some capital to work with to expand my # of units. Is it possible to get a commercial loan on all 6 rentals and open an equity line of credit on them as well to help purchase other propeties? If so will this also help me to obtain more houses using conventional methods by freeing up six conventional mortgages? Thank you for any input on this matter.
Sure you can. It's a small commercial deal, but doable. If you have good terms on the first 4 duplexes, just refi the ones that you need. You'll be paying more points and closing costs because you're refi'ing more property.
Commercial loans are much more intensive. You may be able to get a slightly better rate, but I wouldn't expect miracles.
Lines of credit are MUCH MUCH MUCH more readily available in the residential side of things. If you got commercial financing at 70% LTV, you'd be hardup to get a second line of credit at a half decent rate for more than 10% LTV (above your first). However with residential you could do 30% (for 100% LTV)
My advice....refi the last two and get lines of credit on all of them separatly.
When you say refi the last two, do you mean commercially or conventionally?
Is it very costly to get lines of credit? Thanks for your reply?
Some lender will allow you to cross colteralize a loan Basically borrowing againt more than 1 property in a single mortgage.
If you plan on holding these for a while, you might want to look at your avg. interest rate on the properties. Would it get better to refi all of them and lock a 5,7,30 yr. rate if you are concerned about rates going up.
selling some of the properties in the "portfolio" could make this a less desireable loan.