Case Study16 Residential Rental Property Loans in California
Loan Amount: $125,000 to $250,000
Loan-To-Value: 65% LTV across the portfolio
Rate: 6.25% to 6.75%
Term: 30-Year Fixed Rate Loans
Situation & Challenge
A California real estate investor with over 40 rental properties financed with 5-6 private money blanket loans spread across the portfolio wanted to lock in 30-year fixed rate loans before interest rates increased. Fannie Mae & Freddie Mac allow 10 financed properties while community banks mainly give 5-year terms. Obviously, the investor fell outside the box of Fannie & Freddie and their local bank.
Solution & Result
First Capital worked with a Non-QM lender to refinance 16 of 40 properties into 30-year fixed rate rental property loans with rates from 6.25% to 6.75%. This allowed the investor to pay off all private money loans, avoid future balloon payments when the loans reached maturity, and lock in long-term costs across the rental property portfolio.
Additionally, the investor freed up 24 properties of mortgages, allowing them to use those properties as collateral for future investment when opportunities are presented.