Updated
Scenario assumptions
| Location | Chicago, Berwyn, Cicero, and Oak Lawn, Cook County, Illinois |
|---|---|
| Property type | Illustrative five-property rental portfolio (three single-family, two two-flats) in Chicago and suburban Cook County |
| Loan type | Modeled blanket DSCR cash-out refinance |
| Loan amount | $1,095,000 modeled blanket loan (60% LTV on $1.825M combined value) |
| Close time | 30 business days modeled |
What this portfolio example tests
This is an illustrative scenario, not a completed Jaken Finance Group loan. Every value, rent, tax bill, and rate below is an assumption. The goal is to show how a multi-property refinance should be sized when Cook County property taxes take a large share of rent.
The modeled investor owns five rentals collected over several years. Three are single-family homes and two are two-flats. They sit in Chicago and three inner-ring suburbs. One property still carries a hard money loan nearing maturity. One is owned free and clear.
The investor wants to consolidate everything into a single DSCR loan and pull out cash for the next purchases. A DSCR loan qualifies on the rent the properties produce, not on the owner’s personal income. A blanket loan puts several properties under one mortgage.
The question is not “how much can I borrow?” It is “how much can I borrow and still have the portfolio pay for itself?” For program details, see portfolio refinance in Chicago and blanket portfolio DSCR loans.
The five properties
| Property | Location | Assumed value | Monthly rent | Existing debt |
|---|---|---|---|---|
| A. Brick bungalow | Berwyn | $365,000 | $2,550 | $180,000 |
| B. Two-flat | Cicero | $410,000 | $3,300 | $215,000 |
| C. Bungalow | Portage Park, Chicago | $425,000 | $2,750 | $0 |
| D. Two-flat (hard money maturing) | Chatham, Chicago | $295,000 | $2,700 | $150,000 |
| E. Ranch | Oak Lawn | $330,000 | $2,400 | $190,000 |
| Total | $1,825,000 | $13,700 | $735,000 |
| Property | Annual taxes | Annual insurance |
|---|---|---|
| A | $7,800 | $1,700 |
| B | $8,900 | $2,100 |
| C | $8,100 | $1,800 |
| D | $6,600 | $1,800 |
| E | $7,400 | $1,600 |
| Total | $38,800 | $9,000 |
Taxes alone take about 24% of gross rent. That single fact shapes every decision below.
Deal timeline
| Week | Milestone |
|---|---|
| 1 | Rent rolls, leases, and tax bills gathered for all five properties |
| 2 | Term sheet issued with allocated loan amounts per property |
| 3–4 | Five appraisals ordered with rent schedules |
| 5 | Title searches on five parcels; payoff letters requested |
| 6 | Appraisals back; leverage decision made |
| 7 | Entity documents and insurance binders finalized |
| 8 | Blanket loan closes in 30 business days (modeled); four loans paid off |
Property-by-property test at 70% LTV
The first draft sized the loan at 70% of combined value, well under Jaken Finance Group’s published 80% cash-out ceiling. The rate is modeled at 7.5% with a 30-year amortization. That sits inside the DSCR range of 5.75%–10.5%.
| Property | Allocated loan | Monthly PITIA | Monthly rent | Standalone DSCR |
|---|---|---|---|---|
| A | $255,500 | $2,578.23 | $2,550 | 0.99 |
| B | $287,000 | $2,923.49 | $3,300 | 1.13 |
| C | $297,500 | $2,905.24 | $2,750 | 0.95 |
| D | $206,500 | $2,143.93 | $2,700 | 1.26 |
| E | $231,000 | $2,365.24 | $2,400 | 1.01 |
| Portfolio | $1,277,500 | $12,916.13 | $13,700 | 1.06 |
PITIA means principal, interest, taxes, insurance, and association dues. DSCR is monthly rent divided by PITIA.
Properties A and C fall below 1.0 on their own. As separate loans, they would need more cash in or a higher rate for low coverage. Inside the blanket, the Chatham and Cicero two-flats carry them. That is the main underwriting advantage of a blanket loan. It is also its main risk.
Why coverage above 1.0 was not enough
Lenders measure coverage against PITIA only. Owners also pay for vacancy and repairs. The investor rebuilt the model on an annual net income basis.
| Annual line | Amount |
|---|---|
| Gross rent ($13,700 × 12) | $164,400 |
| Vacancy (5%) | −$8,220 |
| Property taxes | −$38,800 |
| Insurance | −$9,000 |
| Maintenance and capital reserve (7%) | −$11,508 |
| Net operating income (self-managed) | $96,872 |
Then the investor compared that income to debt payments at three leverage levels.
| Leverage | Loan amount | Annual debt payments | Income minus debt | Lender DSCR |
|---|---|---|---|---|
| 70% LTV | $1,277,500 | $107,193 | −$10,321 | 1.06 |
| 65% LTV | $1,186,250 | $99,536 | −$2,664 | 1.12 |
| 60% LTV (chosen) | $1,095,000 | $91,880 | +$4,992 | 1.18 |
At 70%, the loan qualifies but the portfolio needs about $860 a month from the owner. At 60%, the properties cover their own costs with a modest cushion. The investor gave up about $182,500 of extra proceeds to avoid a negative portfolio.
Worked closing numbers at 60% LTV
| Closing line | Amount |
|---|---|
| New blanket loan | $1,095,000 |
| Payoff of four existing loans | −$735,000 |
| Origination (1.5 points) | −$16,425 |
| Five appraisals ($650 each) | −$3,250 |
| Title, recording, and legal across five parcels | −$9,500 |
| Net cash to investor | $330,825 |
That cash also retires the maturing Chatham hard money loan. Removing a balloon payment deadline was as valuable to the investor as the cash itself.
Blanket loan terms to read closely
- Partial release. This model assumes a property can be sold and released at 115% of its allocated loan amount. Selling Property D, allocated $177,000 at 60% LTV, would require paying down about $203,550.
- Prepayment schedule. The model assumes a five-year step-down: 5%, 4%, 3%, 2%, then 1%. Early sales cost more.
- Cross-default. A problem on one property can put the entire loan in default. Keep reserves for the weakest house.
- Remaining coverage after a release. Selling a strong property like D leaves weaker ones behind. Lenders may require coverage tests before approving a release.
Conditions the lender would set before closing
A blanket loan closes only when all five properties clear. In a model like this, the conditions list would look roughly like this:
- Allocated loan amounts written into the loan documents for each property, so release prices are fixed up front.
- Five appraisals with rent schedules. Single-family homes and two-flats use different appraisal forms, so expect different report fees and turn times.
- One borrowing entity. All five deeds recorded into one LLC, or into affiliated LLCs with the same owners, before closing.
- Clean title on every parcel. No unpaid tax sales, open mechanic’s liens, or unreleased old mortgages.
- No open violations. The Chicago houses need a clean violation record. Suburbs that license rentals need current licenses.
- Payoff letters for all four loans. The Chatham hard money payoff must be dated before its maturity.
- Insurance on each property naming the new lender, with rent loss coverage.
- Post-closing liquidity. Many lenders want several months of combined payments in reserve. Six months at the 60% loan is about $69,840.
Stress tests at the chosen 60% LTV
The investor ran two more shocks against the chosen loan: a rate 1% higher at lock and rents 10% lower.
| Scenario | Lender DSCR | Annual income minus debt |
|---|---|---|
| Base: 7.5%, $13,700 rent | 1.18 | +$4,992 |
| Rate 8.5% | 1.10 | −$4,163 |
| Rent $12,330 (−10%) | 1.06 | −$9,475 |
| Both | 0.99 | −$18,630 |
Lender coverage stays above 1.0 in the first three rows. None of the shocks is extreme, yet each one erases the thin cushion. Vacancy concentration is the other risk. If the Cicero two-flat sat empty for three months, the lost $9,900 would exceed the whole portfolio’s annual vacancy allowance of $8,220.
Where the $330,825 goes
The investor split the proceeds before closing, not after.
| Use | Amount |
|---|---|
| Reserve held back (about six months of combined payments) | $70,000 |
| Down payments and closing costs on the next two rentals | $220,000 |
| Unassigned cushion | $40,825 |
Keeping $70,000 in reserve means a bad quarter does not force a sale. It also keeps the portfolio ready for the cross-default risk described above.
Cook County factors that shaped the numbers
Cook County reassesses Chicago, the north and northwest suburbs, and the south and west suburbs on a rotating three-year cycle. A reassessment in the portfolio’s area can move taxes sharply in one year. The investor modeled a 10% tax increase across all five properties. That adds about $323 a month and pushes the 60% lender coverage from 1.18 to about 1.15.
Chicago rentals must also follow the city’s Residential Landlord and Tenant Ordinance. Suburban properties follow their own municipal rules, and some suburbs require rental licenses and inspections. Confirm each town’s requirements before the appraiser visits. Our Chicago RLTO guide covers city rules.
When five separate loans make more sense
A blanket loan is not always the better tool. Separate loans can win when:
- You plan to sell one or two properties within three years.
- Each property already meets coverage on its own.
- You want to refinance individual properties when rates drop.
- Your properties sit in different states or ownership entities.
Our article on portfolio vs individual DSCR loans compares both paths in detail.
Before you copy this structure
Build your model on net operating income, not only lender coverage. Test at least three leverage levels. Identify which properties fail on their own and decide whether you are comfortable carrying them.
Run each property through the DSCR calculator, then read our Chicago portfolio refinance article. For single-property options, see DSCR loans in Chicago and cash-out refinance in Chicago.
Ready to test your own portfolio? Submit your scenario or call (833) 264-7776.
Related
- Portfolio refinance Chicago
- Blanket portfolio DSCR loans
- DSCR loans Chicago multi-family
- Chicago hard money lenders
Find the right loan for your deal · (833) 264-7776