Looking for a lender for a 25-unit portfolio in Detroit, MI

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Looking for a lender for a 25-unit portfolio in Detroit, MI

Dan Aharon
Member since 2021 · 9 posts · 8 votes

I'm considering buying a 25-unit portfolio in Detroit, MI of houses - with value per unit starting at $30k and going up to $150k.

Has anyone had good experiences with a lender that can take a portfolio approach and offer a competitive rate?

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Drew SygitBusiness Member
Property Manager · Royal Oak, MI · Member since 2012 · 13k+ posts · 9k+ votes
5y

There are some lenders here on BP, you can look up.

I'd be cautious about a $30k Detroit house. High probablitity of being in a Class D neighborhood. 

Make sure you have your own inspections done and find a good PMC to give you their opinion BEFORE you buy.

You might want to read our series about “How to Screen a PMC Better than a Tenant”, since selecting the wrong PMC is usually more harmful than selecting a bad tenant:

https://www.biggerpockets.com/member-blogs/3094/91877-how-to-screen-a-pmc-better-than-a-tenant-part-1-services-and-processes

[email protected]248-209-6824
Logical Property Management4.9469 Reviews
WebsiteView Page
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  • Mary M.
    Rental Property Investor · Portland OR · Member since 2018 · 2k+ posts · 3k+ votes
    5y

    for a property that large you need a commercial loan you can do a google search for "commercial Mortgage Brokers" in your area and I am sure plenty will pop up. That will be your best bet. 

    You will need excellent cash reserves (6-18 months of PI and maybe PITA) and around 25% down.....   good luck! 

    ETA I didnt see the "houses": in my first read....  I would still contact a commercial mortgage broker as that will probably be your best bet...

    1Reply
  • Dan Aharon
    OP
    Member since 2021 · 9 posts · 8 votes
    5y

    Thanks, Mary! Have the cash reserves and yes this is for SFRs.

    Will do some Googling.

    0Reply
  • Drew SygitBusiness Member
    Property Manager · Royal Oak, MI · Member since 2012 · 13k+ posts · 9k+ votes
    5y

    There are some lenders here on BP, you can look up.

    I'd be cautious about a $30k Detroit house. High probablitity of being in a Class D neighborhood. 

    Make sure you have your own inspections done and find a good PMC to give you their opinion BEFORE you buy.

    You might want to read our series about “How to Screen a PMC Better than a Tenant”, since selecting the wrong PMC is usually more harmful than selecting a bad tenant:

    https://www.biggerpockets.com/member-blogs/3094/91877-how-to-screen-a-pmc-better-than-a-tenant-part-1-services-and-processes

    [email protected]248-209-6824
    Logical Property Management4.9469 Reviews
    WebsiteView Page
    2Reply
  • Lamar Lee
    Developer · Detroit, MI · Member since 2020 · 24 posts · 44 votes
    5y

    If you can figure out the financing and have the right boots on the ground, this deal can be very profitable. There are lenders who will do the deal but they will prob only lend 60% LTV and the rate will be 9-10%. The hardest part will be, you'll have to do an appraisal and clear title on each property and that can be costly and very time consuming. The good thing is, if this deal is what you think it is, it will cash flow enough to pay that rate, and still yield you substantial cash flow! I've found it to be easier finding 30 good deals and doing them individually.

    2Reply
  • Account Closed
    Lender · Charlotte, NC · Member since 2021 · 218 posts · 117 votes
    5y

    Are the properties in livable condition and ready to rent out? Do you have the rent/tax/insurance/HOA of the properties? As @Mary M. mentioned, commercial loan would be your ideal choice to purchase this in a package. I have had some experience with such financing solution, called portfolio loan or blanket loan. The rates are 4.5-5.5% with 1-3 points, LTV can go up to 80% for purchase.

    1Reply
  • Lamar Lee
    Developer · Detroit, MI · Member since 2020 · 24 posts · 44 votes
    5y

    @Wenda Wang

    Is there a minimum value per property?

    1Reply
  • Account Closed
    Lender · Charlotte, NC · Member since 2021 · 218 posts · 117 votes
    5y

    @Lamar Lee Yes, it is $75k.

    1Reply
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