3rd Rental and I paid Cash...a question

Paid 35k for it (3 unit)
We just put 15k into it (Ton of sweat equity, laminate floors, new roof, 4 rooms new carpet, house inside completely painted, etc…we really take care our properties)
The house down the street sold for around 99k and our house is clearly the better of the two. I used 35k from my savings to purchase and Lowees card, etc to pay for the supplies. I want to consolidate under 1 payment and refi…how should I approach the banks?

Any ideas…will the banks help me consolidate the whole 50k in to 15 year loan?


Hi Sean

You’ll need a commercial/business loan to get the cash out since the conforming guidelines have changed to 6 months. These loans can be done in the name of a business entity and will not report to your personal credit should you use the business tax I’d. Debt service ratio (cash flow) is 1 of the more important factors. If you don’t know how a bank calculates debt service ratio (this is not debt to income ratio for conforming lending), let me know.

thank you so much!

Yes, portfolio lenders are the way to go now for unseasoned cash out. Try credit unions in the same area as the property. A great resource is here:


DSCR = Net Operating Income / Total Debt service

Net Operating Income: $36,000 (annual)
Debt service (mortgage payment P&I): $30,000
DSCR = 1.20

That’s the minimum typically accepted.

If you’re going for that low of a loan amount I’d use 7.5-8% as an estimated rate on a 30 year amortization.