In 2023 - I’m looking to buy 5-10 units in NC, SC or TN (I know - everyone is also!). I own 5 doors (1 STR and 4plex) in NC. How do I go about getting commercial financing? Any ideas for people that scaled from 2 to 10. How did you get financing in the last 1-2 years pls. I don't think something from last 10-15 will be as relevant. I should be able to get to 20% down if it's under 1M.
Yes - spoke to 2. I’m hearing it’s hard to get commercial loans as 1st time right now. I also need to figure out options to getting 30% - I’ll have 20%. If my budget is 1M.
Yes - spoke to 2. I’m hearing it’s hard to get commercial loans as 1st time right now. I also need to figure out options to getting 30% - I’ll have 20%. If my budget is 1M.
Hi Chi,
Feel free to reach out. There are plenty of options out there.
Yes - spoke to 2. I’m hearing it’s hard to get commercial loans as 1st time right now. I also need to figure out options to getting 30% - I’ll have 20%. If my budget is 1M.
Hi Chi,
Feel free to reach out. There are plenty of options out there.
-Scott
That’s great. I’ll send an email to find time to connect. Thanks!
Contractor · Scottsdale, AZ · Member since 2010 · 2k+ posts · 3k+ votes
3y
Try a local credit union. I used a credit union on the only 2 commercial deals I've done and it was a pretty smooth process. They underwrote the deal based on the location, the quality of the tenant, the lease terms, and the appraised value. I (as the borrower) played a pretty small part in their decision.
Try a local credit union. I used a credit union on the only 2 commercial deals I've done and it was a pretty smooth process. They underwrote the deal based on the location, the quality of the tenant, the lease terms, and the appraised value. I (as the borrower) played a pretty small part in their decision.
Real Estate Broker · Reno, NV · Member since 2023 · 267 posts · 297 votes
3y
Remember this is going to be a multifamily DSCR loan. You may not be able to put 20% down unless the property cash flows enough to cover the min DSCR ratio (typically 1.25%).
In our market because interest rates are through the roof investors have to put 30-50% down. So this small MF range you are in could cause the down payment to go up (based on the cash flow). We have a 10 plex in escrow right now and our client may be looking at 50% down to hit the 1.25 DSCR. It's been a tough deal. I've been doing multifamily brokerage for 8 years and this is one of the toughest deals (because of the lending environment) I've ever done.
Do you know the difference between residential multifamily lending 2-4 and commercial multifamily lending 5 and up?
Try a local credit union. I used a credit union on the only 2 commercial deals I've done and it was a pretty smooth process. They underwrote the deal based on the location, the quality of the tenant, the lease terms, and the appraised value. I (as the borrower) played a pretty small part in their decision.
Local to where I live or where the location is?
For me it was both, local to where I live and local to the location of the subject property. It was good because I got the impression that the fact that lender knew the exact buildings I was buying was really helpful and contributed to their approval.