Its 2016, the housing market shows signs of life and you have owned an investment property for 10+ years. Seems like a great time to refinance and get a little cash out for improvements or replenish the all important investment property cash reserves. I ran into a snag I have never had in refinancing investment property; The appraisers could not find comps for 2 of my properties in 2 different states, stalling the refinance process. Doing some research to figure out how this could be, I discovered:
- There were less listings for sale in general and next to nothing on the market for a multi-unit.
- I had purchased the properties in a primarily single unit area. One duplex in a rural area minutes from a larger city and one 2 unit in a ski town dominated by either condo villages or ski chalets.
Keep this in mind when you decide to restructure a loan on a multi-unit, browse the area for listings and look for possible comps. If you come up short it might not be the right time to start the long process of refinancing the property. Refinancing or restructuring a loan on investment property is a bit more tricky then reworking a home loan, see my recent post on listing headaches for another example.