You bought and fixed several houses with short-term money. Now they are rented, the maturity dates are stacking up, and every loan has its own payment and extension fee.
In short: You can refinance multiple rental properties into one loan by replacing several short-term hard money notes with a single blanket portfolio loan once the properties are rented. The new loan is sized up to 75% of the combined value and underwritten on rental income, so it can pay off the hard money and leave one long-term payment. Seasoning rules decide whether lenders use the new appraised value or your cost basis.
Hard money is built for buying and fixing, not holding. Rates are higher, terms are short and extensions cost money. Carrying five of these loans means five maturity dates to manage.
A portfolio loan swaps all of that for one long-term note. Payments usually drop, and free-and-clear properties can be added to the pool to raise the loan amount.
Consolidation also cleans up your balance sheet. One loan with one lender is easier to explain to partners, your CPA and future capital sources. A stack of short-term notes is not.
Illustrative example only. An investor has 5 rehabbed rentals with $1,050,000 of hard money debt at an example 11.5% interest-only rate.
The 5 houses are worth $1,550,000. Two more rentals worth $450,000 are owned free and clear.
| Line item | Example amount |
|---|---|
| Combined value (7 properties) | $2,000,000 |
| New portfolio loan at 70% LTV | $1,400,000 |
| Hard money paid off | -$1,050,000 |
| Example closing costs | -$42,000 |
| Cash remaining to investor | $308,000 |
| Old hard money interest payment | About $10,063 / month |
| New P&I at example 7.5%, 30-year | About $9,789 / month |
The new payment is slightly lower than the old interest-only payment, even though it now pays down principal. The investor also walks away with about $308,000 and no maturity dates hanging over the portfolio.
Leaving leverage at 70% instead of 75% in this example gives the DSCR more room. That is a common choice when some of the rents are newly signed.
If you refinance soon after buying, many programs cap the loan at your purchase price plus documented rehab costs. After a seasoning period, they lend on the new appraised value. Seasoning periods vary, commonly 3–6 months for rate-and-term and up to 12 months for some cash-out programs.
Keep receipts, draw records and before-and-after photos for each rehab. Clear documentation helps the appraiser and underwriter credit your improvements.
If a property is still being renovated or has no tenant, it does not belong in a long-term portfolio loan yet. Forcing it in can lower the DSCR for the entire pool or reduce the loan amount.
Planning to sell some houses within a year or two? Think about release terms before you lock them into a blanket. Separate DSCR loans or a smaller blanket for the keepers may serve you better.
A portfolio refinance can take several weeks once valuations and title are ordered. Start 60 to 90 days before the first maturity if you can.
Our financing team can review your hard money payoffs and rent roll and typically bring back 2–3 options, often within 48 hours. If one or two houses are not ready, a short bridge extension on those alone may be cheaper than waiting to refinance everything.
Yes. Once the properties are rented, a blanket portfolio loan can pay off multiple hard money notes in one closing. You end up with one long-term payment instead of several short-term ones.
Many programs will refinance once the property is complete and rented. Whether the loan uses appraised value or your cost basis depends on seasoning, which commonly ranges from 3 to 12 months.
Usually most of them do, since the loan is sized on rental income. A vacant property may be excluded or lower the loan amount until it is leased.
With 5 or more properties, one portfolio loan typically costs less to close and is easier to manage. If you plan to sell some houses soon, separate DSCR loans may be more flexible.
Yes. Paid-off properties add value with no payoff, which can increase the loan amount or lower overall leverage. Many investors use them to help the newly rehabbed houses qualify.
Expect lender fees, a valuation on each property, title and recording costs, and any exit fees on the hard money loans. Because it is one closing, the total is usually lower than refinancing each house separately.
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