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Multifamily Refinancing - Property Based Lending

Multifamily RefinancingRefinancing remains one of the most important ways rental-property owners can quickly increase the size of their portfolios.

This is especially true with multifamily refinancing.

Whether you currently own one or you are planning to purchase a multifamily unit soon, it’s important you understand how much this practice can help you build your holdings.

What Is Considered a Multifamily Home?

In terms of rental properties, a multifamily home covers any that consist of more than one unit which, could be used to house more than a single family. Common types of multifamily homes include:

Anything above 5 units is also considered a commercial multifamily property 


  • Fourplex
  • Quad
  • Triplex
  • Duplex

So, the term “multifamily property” is fairly self-explanatory.


However, what isn’t always clear to investors is why many choose these properties over single-family homes.

There are three advantages to owning multifamily properties:

  • Vacancy Is Less of an Issue – Nothing will kill your property’s cash flow as fast as vacancy. After all, while plenty of other problems can interrupt your cash flow, if you don’t have a tenant, you don’t have any cash flow to begin with. While your entire unit may not always be full, as long as you have enough tenants to cover your monthly mortgage payment, you’re in far better shape than a single-family home owner dealing with a vacant property.

  • Portfolio Growth Takes Less Time – If you dream of a portfolio of 20 units, you could potentially achieve that goal by simply buying one 20-unit apartment building. On the other hand, you’d need to purchase 20 single-family homes to get there, something that’s extremely difficult to do, especially without a nontraditional lender’s help (more on that later).

  • Higher Returns – Obviously, owning more units means higher returns. However, as you have more control over what you can charge in monthly rent for each of those 20 units – as opposed to just 1 – it’s easier to adjust pricing to increase profits.

Of course, if you already own a multifamily unit, you are probably very familiar with these advantages. They’re most likely why you purchased yours in the first place.

In that case, it’s more important that you understand why now is the time to consider the benefits of multifamily refinancing.

Why Now Is the Time for Multifamily Refinancing

There are three main reasons you should act quickly to refinance your multifamily unit.

1. 2019 Is Going to Be the Ideal Year for Multifamily Refinancing

The sooner you refinance your multifamily unit, the sooner you can take advantage of the current real estate market, which may be the best it’s going to look for landlords in quite some time.

That’s because housing prices are expected to increase in 2019, as they’ve been slowly doing for a few years now. So, now would be the time to purchase more properties before the costs involved become too expensive. At some point in the near future, expanding your portfolio may become too cost-prohibitive to be realistic. When that happens, you’ll be stuck with your current holdings until prices begin leveling off again.

Of course, the flipside is that, as prices rise, so will the number of renters looking for places to live. Scale up your portfolio now – with multifamily refinancing – and you’ll be prepared to collect rent from as many tenants as possible.

2. Keep Your Multifamily Unit Competitive

That said, refinancing may also be a smart way to free up funds you can use to carry out any repairs or maintenance work that needs to be done on your properties.

Even though more renters will make it a renter’s market, you’ll still face plenty of competition. Don’t miss out on this incredible renting opportunity because your multifamily property doesn’t compare well with others.

Furthermore, the better-maintained your properties are, the easier it is to justify higher rents, meaning greater returns on your portfolio.

3. Immediately Increase Your Property’s Rate of Return

Perhaps the most obvious reason to consider multifamily refinancing is simply because, given its potential size, you could have built up a significant amount of equity in your property.

Unfortunately, all of that equity is currently locked up doing absolutely nothing for your bottom line. What’s worse is that, as time goes on, the market could greatly decrease that equity’s potential to help with any of the above.

At the very least, it’s worth looking into how much financing your current equity would allow you to access. You might pleasantly surprised.

The Advantage of Using Nontraditional Loans for Your Multifamily Refinancing

As we touched on above, traditional lenders tend to make financing difficult for rental-property owners, especially those with larger portfolios.

For example, despite their best intentions, Fannie Mae’s lending practices are clearly not accommodating for investors who want to expand their holdings to 10+ homes.

Naturally, these limitations extend to multifamily refinancing practices, as well. Even if you’ve built up a significant amount of equity in your holdings over time, don’t expect a lot of help from traditional lenders.

Fortunately, nontraditional lenders are here to help. In fact, these nonbank lenders now dominate the mortgage market in large part because of how many more options they offer than traditional alternatives.

We Make Multifamily Refinancing Easy

Even better, you don’t have to look far for one of these nontraditional lenders to assist you with your financing needs.

Here at Rental Home Financing, we’re not just a nontraditional lender, either. We actually focus on clients just like you, those who own numerous properties with ambitions to continue expanding their portfolios. We understand your unique needs and know that banks generally don’t understand – or simply aren’t interested in – how to meet them.

Our underwriting is straightforward. As a property-based lender, we don’t care about your tax returns, so there’s no need to dig up your W-2s or 4506-Ts. We aren’t interested in your current employment status or even how many properties you already have in your portfolio.

For the most part, all we really care about is your multifamily property and its ability to help you pay back your loan.

We can even offer you up to 75% of LTV (loan-to-value) ratio for your multifamily refinancing needs.

So, if you’re looking for a lender that can assist you with refinancing, purchasing, or even cash-out financing, contact us today. We look forward to hearing from you.

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About Rental Home Financing:

Rental Home Financing, as the best mortgage lenders we originate rental home loan products and cash out refinance investment property loans as the best investment property refinance lenders. Commercial blanket loans are available with a commercial purpose to suit your needs.

Also, as DSCR loan specialists, we are currently authorized to make such loans in most all areas of the United States. Specific circumstances will determine whether we have the ability approve/close portfolio rental home loans in your state(s). When you are ready to get a mortgage for rental property, we are ready to serve you.

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