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- March 19, 2024
- Insights
Encore recently helped a borrower with 23 SFR rentals in the Durham and Atlanta markets refinance from a bridge loan to a rental portfolio loan.
For investors with multiple properties, a rental portfolio loan can often be a great option for refinancing. Read on to see how we helped this borrower lower their monthly payments, reduce their personal risk, free up significant capital, and avoid costly extension fees with a single portfolio loan.
Details
- Loan Amount: $3,700,000
- Collateral: 23 Single Family Rentals (SFRs)
- Markets: Durham, NC and Atlanta, GA
- Time to close: 40 days
Challenge
The borrowers approached Encore Finance with their properties financed on a private bridge loan that carried a double-digit floating interest rate. They had four main goals:
- Recapitalize equity from their properties
- Reduce and fix their monthly payments
- Shift their financing from recourse to non-recourse to lessen personal liability
- Secure a quick closing to avoid costly extension fees from their soon-to-mature bridge loan
Solution
After examining the client’s property portfolio and listening to their concerns and objectives, Encore structured and quickly delivered a rental portfolio loan that met the borrower’s criteria on all points.
The solution was a $3,700,000 non-recourse, fixed-rate term loan with a 5-year term and 60% Loan-to-Value (LTV) ratio, using the 23 SFRs as collateral.
Outcome
The new loan enabled the borrowers to recapitalize the equity accumulated through renovation and appreciation by cashing out proceeds. We structured the loan with a full-term, interest-only payment at a lower interest rate than their prior bridge loan, which resulted in monthly savings of thousands of dollars.
Additionally, the loan was non-recourse, accomplishing the goal of minimizing the borrowers’ personal liability with this financing. The transaction was efficiently closed in 40 days, allowing the borrowers to avoid extension fees associated with their bridge loan.
Reach Out Today to Discuss Your Next Loan
Encore Finance offers a range of lending solutions to real estate investors, including bridge loans, rental portfolio loans, and build for rent loans.
Please reach out to Ryan Harper with any potential loan opportunities.
Email: [email protected]
Phone: (203) 919-2986
