Commercial Loans for Residential Property
I realize I am new to the investing in real estate and all, but I just wanted to share this as it helped me purchase my first rental property. I recently acquired a 2/1 for 49.9k with 10k down plus 1200 or so in closing costs here in Wichita, KS. My issue with the purchase was getting the finance for fixing or updating the house once the 13 year tenant moved out. She was looking for a place long before I took over but I did work with her. Once she moves out in December I will be able to update the property through my commercial loan. Here is the exciting part. I knew nothing of commercial loans before all this. I found out by talking to a commercial loan officer at a bank that I can use commercial loans for residential property. Here is where it got good for me. I was able to get a 25 year loan with a 5 year fixed rate at 4.25% ANNNNNDDD I was able to roll all the costs of updating the property into the loan but has to be done within the first 6 months of the purchase. I got an appraisal done and found the property is appraised around 82k. They loan up to 80% of the value being a little over 65k. So NOW I have about 25k to use for updating the property. The only thing is that I would do it myself but circumstances make me need to use a contractor. Bummer. Nonetheless still exciting. There you have it. My learning about commercial loans for residential purposes in a nutshell. Hope someone finds this helpful.