The Challenge
A sponsor approached Encore Finance looking to unlock equity from a seasoned portfolio of 34 single-family rentals and redeploy that capital into continued growth.
As the owner of a property management company overseeing more than 3,200 units across six states, he had spent over two decades building, acquiring, and managing residential assets, with particularly strong roots in Arkansas.
Like many experienced operators, this portfolio had been assembled over time through a mix of strategies:
- Direct purchases from a national homebuilder
- Individual acquisitions over multiple years
- Bulk purchases followed by renovation and lease-up
- Ground-up development completed by the sponsor
By the time he came to Encore Finance, the portfolio was highly stabilized. Nearly all properties were occupied, cash flowing, and seasoned with a weighted average hold of approximately nine years.
Over that time, the sponsor had created significant value through appreciation, operational discipline, and targeted renovations.
The opportunity was clear: unlock that embedded equity and redeploy it into continued portfolio growth without disrupting the performance of the existing assets.
The Solution
Encore Finance structured a single portfolio loan secured by all 34 properties across two MSAs, allowing the sponsor to consolidate the assets and execute a strategic cash-out refinance.
The loan was designed to maximize proceeds while maintaining strong in-place coverage and long-term flexibility.
Loan Terms:
- 5-year, interest-only structure
- 60% loan-to-value (LTV)
- 1.28x underwritten DSCR
- 34 stabilized SFR properties across two markets
Given the quality of the portfolio (including a high concentration of newer construction and recently renovated homes), the sponsor elected a lower spread, yield maintenance prepayment structure. This allowed for maximum cash-out proceeds while maintaining optionality for future portfolio decisions.
The Outcome
With this financing in place, the sponsor was able to unlock substantial equity from a seasoned portfolio and redeploy that capital into new opportunities.
For experienced investors, the ability to consolidate assets, access liquidity, and maintain operational continuity is critical to long-term growth.
Encore Finance structures portfolio loans with that in mind, aligning underwriting with how investors evaluate their own assets and delivering a consistent process from initial terms through closing.
Learn More
To learn more about how Encore Finance portfolio loans can support your investment strategy, reach out to Levi Cooper at Levi@encorefinance.com.
