Hi, Has anyone recently refinanced to combine 2 apartments together? Or know anything about this these days? We own ours with a mortgage, and are planning to buy our neighbors. We know that we'll have to refinance the whole thing to combine legally. Are there any big banks (Chase, CITI, etc...) who still do this? Any advice about the logistics of the whole thing appreciated: We've been told that... [more]
Hi,
Has anyone recently refinanced to combine 2 apartments together? Or know anything about this these days?
We own ours with a mortgage, and are planning to buy our neighbors. We know that we'll have to refinance the whole thing to combine legally.
Are there any big banks (Chase, CITI, etc...) who still do this?
Any advice about the logistics of the whole thing appreciated:
We've been told that we need to have 3 bank appraisals (ours currently, his currently, the combination). Then escrow until the city approved the combo (create opening and plug gas line is what I've been told is minimum).
Architect/Contractor or expediter to draw up plans for the city and our board to approve and then to approve once work is done?
Do we need to do anything else?
Thanks again for any advice on this whole topic!
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Response by ab_11218
over 14 years ago
Posts: 2017
Member since: May 2009
my friend just tried to go through it with chase. it was a nightmare. every two days or so, there was another request, another question. it was dragging.
she got a loan for the 2nd unit from a municipal union (5/1 arm) as an investment property. the rate was not too bad and they didn't drive her up the wall. once she's done with the combo, she'll apply for a single loan.
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Response by jimmcp
over 14 years ago
Posts: 58
Member since: Jul 2009
Call me:
Jim McPartland
Wells Fargo
212.805.1131
james.mcpartland@wellsfargo.com
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Response by GuardHillPotter
over 14 years ago
Posts: 8
Member since: May 2011
This type of combination is common in NYC and you only need one appraisal and there is an escrow. Feel free to contact me with any questions -
Chris Potter
GuardHill
646.519.7551
cpotter@guardhill.com
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Response by deanc
over 14 years ago
Posts: 407
Member since: Jun 2006
we purchase two studios then did a gut renovation. we were lucky that we had 20% down on purchase price and cash to cover closign and then the $100k+ for the renovation so i think the bank thought we were a pretty safe bet.
we used to bank with chase but got the mortgage through citibank.
we now bank with citibank :)
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Response by Corsair
over 14 years ago
Posts: 20
Member since: Feb 2011
I made some inquiries about 3 months ago, but my deal fell through because of the seller (not the bank). The banks were getting more aggressive with escrows to insure that people actually do the combos.
What I heard from the banks I reached out to was:
Citibank - doesn't do combo refis
Wells Fargo - Followed a process similar to BoA below. They went into more detail on the fact that they escrow the *greater* of some amount (it was changing weekly at the time I was inquiring but was $25k I think) and the cost of your renovation. Recommendation was draw up a basic combo (punch a hole and take out second kitchen) get it inspected, get escrow back and then do the rest of the recnovation.
BoA - The following is an excerpt from a loan officer to me in an email. I believe that they had a similar escrow process to WellsFargo:
The basic requirements for a combination are that we lend against the combined property and you have 60-90 days to combine it (which by bank standards means knock out a connecting wall and remove a kitchen – we don’t need you to match paint or anything, just the raw basics).
The appraisal on the transaction is done using a projected future apartment. They’ll want to see some of the rough estimates of what you intend to do, but won’t need full architectural plans and bids, usually. Also, as a side note on value, you will ideally have a 1+1=2.5 type scenario where you’ll pick up some extra square footage through redundancy and some extra value.
Technically if you refi’d the existing one, then purchased the other in cash and combined them, you’re altering the ‘collateral’ of the first loan and breaking the terms. Realistically I would doubt that we’ll call the loan and take the property (not worth it – too expensive, too much effort), but technically we could, so just on the off chance, I’d avoid it.
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my friend just tried to go through it with chase. it was a nightmare. every two days or so, there was another request, another question. it was dragging.
she got a loan for the 2nd unit from a municipal union (5/1 arm) as an investment property. the rate was not too bad and they didn't drive her up the wall. once she's done with the combo, she'll apply for a single loan.
Call me:
Jim McPartland
Wells Fargo
212.805.1131
james.mcpartland@wellsfargo.com
This type of combination is common in NYC and you only need one appraisal and there is an escrow. Feel free to contact me with any questions -
Chris Potter
GuardHill
646.519.7551
cpotter@guardhill.com
we purchase two studios then did a gut renovation. we were lucky that we had 20% down on purchase price and cash to cover closign and then the $100k+ for the renovation so i think the bank thought we were a pretty safe bet.
we used to bank with chase but got the mortgage through citibank.
we now bank with citibank :)
I made some inquiries about 3 months ago, but my deal fell through because of the seller (not the bank). The banks were getting more aggressive with escrows to insure that people actually do the combos.
What I heard from the banks I reached out to was:
Citibank - doesn't do combo refis
Wells Fargo - Followed a process similar to BoA below. They went into more detail on the fact that they escrow the *greater* of some amount (it was changing weekly at the time I was inquiring but was $25k I think) and the cost of your renovation. Recommendation was draw up a basic combo (punch a hole and take out second kitchen) get it inspected, get escrow back and then do the rest of the recnovation.
BoA - The following is an excerpt from a loan officer to me in an email. I believe that they had a similar escrow process to WellsFargo:
The basic requirements for a combination are that we lend against the combined property and you have 60-90 days to combine it (which by bank standards means knock out a connecting wall and remove a kitchen – we don’t need you to match paint or anything, just the raw basics).
The appraisal on the transaction is done using a projected future apartment. They’ll want to see some of the rough estimates of what you intend to do, but won’t need full architectural plans and bids, usually. Also, as a side note on value, you will ideally have a 1+1=2.5 type scenario where you’ll pick up some extra square footage through redundancy and some extra value.
Technically if you refi’d the existing one, then purchased the other in cash and combined them, you’re altering the ‘collateral’ of the first loan and breaking the terms. Realistically I would doubt that we’ll call the loan and take the property (not worth it – too expensive, too much effort), but technically we could, so just on the off chance, I’d avoid it.