Commercial RE Loan Minimums

11 Replies

I'm looking at a 5-plex in a rural town for $50k. Would it be possible to obtain a loan for suck a low amount after a down payment or would this need to be a cash deal?

Yes. I just closed on a duplex for 52k a couple weeks back. Walk into local banks and introduce yourself to a loan officer. The terms I got were 5/1 amortized over 15 years with 30% down. Not the best, but for a commercial loan for only 37k not too bad @ 4.25%

Good luck

Most commercial lenders I've talked to have a minimum of $100K loan amount. Your best bet would be to call around to as many local lenders as you can and try to find one that will do a loan that small. You may have a hard time locating one and might need to do the deal all cash or find another way to finance it (hard money, private money, etc)

Medium logoMichael Seeker MBA, Renting502 | http://www.Renting502.com | Podcast Guest on Show #94

@Josh C. I'd like to think small town banks would be used to lending smaller amounts. Good to know this can be done. Thanks.

They're definitely out there. I just got a commercial loan on a $32k property. You will have to find a local bank though, the big ones won't do it. Just a matter of following the advice above and doing the legwork.

Originally posted by @James Syed:

A local bank would do any amount. I have borrowed as less as $18,000

Good luck

Would you mind sharing more details on that loan? The purchased price and terms,etc? 

@James Syed

 Thanks! 

It's great to know that there are lenders out there doing those loans.

Also a bit jealous that you can buy properties that cheap in your area...median home prices in L.A are now over $400,000 ...and that gets you a normal sized home in a not so great area.. 

@Joseph M.

I would like to add here that I had to spend $15,000 on rehab, plus acquisition cost was $3000 so total investment was $43,000 and it is rented now for $595 a month.

That is GRM of 6.02.

It's a 2 bedroom, 1 bath home with 1 car garage, full basement, I am sure in California, you would $1500 rent for it, but you would also have to pay much higher price.

In addition, vacancy rate in this area is about 25% and that is high, it took me 3 months after heavily advertising to get a tenant.

Hope it clarifies further.

Medium decent properties logo jpeg  1 James Syed, Decent Properties, LLC | [email protected] | 618‑406‑9775 | http://www.decentproperties.com | IL Agent # 471018522

Hi @James Syed

Thanks for clarification , yes prices would be a lot higher but vacany is pretty low . There is actually a housing shortage the city has admitted , at the same time it seems they make it so hard to develop property in the city and projects get scaled back or killed all the time .

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