Sacramento landlords who bought a decade or more ago often hold a portfolio with very different tax bills on nearly identical houses. That is Prop 13 at work, and it is one reason a blanket refinance can cash flow better here than a fresh purchase of the same homes would.
In short: LendingStreet finances five or more Sacramento-area investment properties, each 1 to 8 units, under one blanket DSCR loan qualified on the portfolio's combined cash flow. You get one closing, one payment, portfolio pricing and release provisions when a property sells. For long-held Sacramento portfolios, low Prop 13 tax bases on older purchases often make the combined ratio work at leverage a new purchase could not reach.
Investors have bought Sacramento rentals for decades because prices were lower than the Bay Area and rents were steady. Many now own five, ten or twenty homes spread across the city and the suburbs, each with its own loan, payment date and maturity.
A blanket loan pulls those properties under one note. That simplifies bookkeeping, lets the strongest properties support the weaker ones in the ratio and gives you one refinance to manage instead of many.
It also helps when some homes are free and clear. A paid-off Oak Park bungalow bought in the 1990s can add equity and rent to the portfolio, which supports cash-out or better terms across the whole group, without selling anything.
Inside the city, Oak Park, Tahoe Park, Hagginwood, Del Paso Heights, North Sacramento and parts of South Sacramento have long been landlord neighborhoods, with 1940s to 1960s bungalows and ranches that rent to working families. Midtown and East Sacramento carry higher values and lower yields.
In the county and suburbs, investors hold ranches and newer tract homes in Citrus Heights, Rancho Cordova, Carmichael, Arden-Arcade, North Highlands and Elk Grove, plus duplexes and fourplexes along the older commercial corridors. West Sacramento, across the river in Yolo County, is another common addition with its own assessor and tax rate.
California assesses property at its purchase price and limits annual increases in assessed value to 2% until the property changes hands. A home bought in 2012 may carry a tax bill a fraction of what a buyer would pay today. In a blanket refinance, those older tax bases stay in place, because refinancing is not a change in ownership.
Be careful about entity changes. Moving properties from personal names into an LLC, or changing who controls the LLC, can raise reassessment questions under California's change-in-ownership rules. Talk with a tax advisor before you retitle properties for a new loan.
This example is illustrative and not a quote. An investor refinances six properties worth $2,665,000 in total, renting for $15,150 a month. Because some were bought years ago, taxes total only $1,860 a month; insurance totals $755.
At 70% of value the loan is $1,865,500, estimated principal and interest is about $12,726 and the total payment about $15,341, a portfolio DSCR of about 0.99x, right at the line. At 60% the loan is $1,599,000, the payment about $13,523 and the DSCR about 1.12x. The lower-leverage version clears 1.0x comfortably and is how many Sacramento investors structure a portfolio refinance.
| Property | Value | Monthly rent | Monthly tax |
|---|---|---|---|
| Single-family, Oak Park | $415,000 | $2,350 | $355 |
| Single-family, Tahoe Park | $455,000 | $2,500 | $395 |
| Single-family, Citrus Heights | $430,000 | $2,400 | $180 |
| Duplex, Arden-Arcade | $560,000 | $3,300 | $210 |
| Single-family, Rancho Cordova | $445,000 | $2,450 | $410 |
| Single-family, Del Paso Heights | $360,000 | $2,150 | $310 |
| Total | $2,665,000 | $15,150 | $1,860 |
With Sacramento prices well above where many investors bought, selling a property or two over time is common. A release provision lets you sell one property and pay down the loan by its release price, which the loan documents set, without refinancing the rest.
After the release, the remaining portfolio has to clear the program's DSCR. Selling a low-tax, high-rent property first can weaken the ratio of what remains, so model the release before you list.
California's statewide rent cap and just-cause rules under AB 1482 apply to many rentals older than 15 years, with an exemption for some single-family homes owned by individuals when proper notice is given. The City of Sacramento also has its own tenant protection program with rent increase limits and eviction rules.
Because rules can differ between the city, the county and suburban cities, note the jurisdiction of each property and check which protections apply. Lenders use current rents, so plan increases within the rules.
Carriers in California have pulled back, and placing coverage on six or ten properties at once can take time. Some investors carry a portfolio policy; others carry individual policies. Either way, the lender will want proof of coverage on every property, and properties in mapped flood zones near the rivers will need flood insurance.
Start the insurance conversation as soon as you decide to refinance. Premium increases on renewal are common in California right now, and a jump in the insurance line across ten properties can move the portfolio ratio as much as a change in rent. Use current quotes, not last year's declarations, when you run the numbers.
Separate DSCR loans keep each property independent, which can be easier if you plan to sell several soon. A blanket loan wins on simplicity and portfolio pricing. Our comparison page lays out the trade-offs. Some programs also allow properties in more than one state on one loan.
Send your rent roll, values, tax bills and loan balances through the form below or call (877) 298-1001. The team will run the portfolio at a few leverage levels and show you what clears.
Five or more investment properties, each with 1 to 8 units.
Refinancing by itself is not a change in ownership. Retitling properties into a new entity can be, so talk to a tax advisor before changing ownership.
Yes. Properties in different cities and counties can be on one loan.
Total rent divided by the total monthly payment, including taxes, insurance and any HOA dues across all properties.
Yes. Release provisions let you pay a set release price for that property, as long as the remaining portfolio still qualifies.
They affect how quickly rents can rise. The loan uses current rents, so plan increases within AB 1482 and any city rules.
Yes, within program LTV limits and as long as the portfolio clears the minimum DSCR. Seasoning varies by program.
No. Our investor loans are business-purpose loans on non-owner-occupied property.
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