On behalf of our client, we obtained $1.3 million in financing for her portfolio of residential investment properties in Miami, Florida. Her portfolio consisted of 5 rental properties (3 single-family residences, 1 condominium, and 1 townhome), and she was seeking to acquire an additional rental property.
We had to overcome some challenges. First, her bank had denied her loan application because she did not meet the bank’s underwriting guidelines. Her income was not sufficiently documented through her tax returns. Second, her credit score was in the 600s. Third, one of the properties in her portfolio was a condominium, and the condominium association had several problems, including low reserves and too many units whose owners were delinquent on paying association fees. As a result, the second bank she went to turned her down for a refinance.
However, we were able to get her approved by a lender under its non-prime loan program for non-owner-occupied investment properties. Additionally, this lender was also willing to refinance the condominium, despite the above-mentioned condo association issues.
Ultimately, we provided her with cash-out refinancing for all 5 of her rental properties at 70% loan-to-value (LTV) under a 5/25 adjustable-rate mortgage (ARM) program with her interest rate fixed for the first 5 years at about 7%. This was a win for her because she was previously paying an interest rate of 9.25% at a much lower LTV.
We also provided her with a purchase loan to acquire a sixth rental property to add to her portfolio. For the purchase loan, we obtained a 30-year fixed rate of about 6% at 75% LTV.
She plans to use the loan proceeds to invest in other residential real estate projects in Florida.