Rental Property Investor · Fort Lauderdale, FL · Member since 2015 · 65 posts · 15 votes
Hi BP! I'm an experienced investor (3 MF deals) with excellent financials and credit. However I'm having a hard time getting any decent rates among community banks where I'm looking to purchase apartment deals of 5-20 units that easily cash flow from day one. Some are asking up to 40-50% down, most include prepayment penalties, and are in the 6.5 - 7.5% interest range with 5 year balloon, 20 year am, full recourse. Does that sound right? Is there a 'bankrate' type website for commercial loans I can compare rates? Is it possible to get rates closer to conventional numbers? Maybe I should instead try to get a SBA loan and target complexes over $1M?
Rental Property Investor · Tucson AZ / Nice FR / Washington DC · Member since 2016 · 1k+ posts · 1k+ votes
8y
It’s about right, couple items are telling. Best you can do is 1% over residential.. but good luck getting that. 6% becoming the norm again. 20 years with 5 arms are standard, and 35% down is norm, little less or more depending factors. Prepayment is a little odd, but not unheard off. Your deal, experance, and finances can dictate that.
Those numbers are right or worse. If you start getting into no income verification loans and no seasoning on title, rates go into 7's and 8's with a couple of points and pretty stiff lender fees. You can buy the rates down and you can buy the prepays down if you want. 75% loan to value is typical though.