I am a real estate investor in Orlando, FL. Currently I am purchasing mostly single family homes. Although my goal is to get into multi-family properties and small apartment buildings. Any advise on financing commercial will be greatly appreciated.
I've found that 10-15 minute discussions with commercial lenders well in advance of you needing money is a good use of a small amount of time. Find out what they need, start building a relationship. Respect their time, but set a goal to find out exactly what they can do for you and what they need from you (e.g .PFS, rent rolls, DCR etc.)
Do you know any commercial lenders that lend in Orlando, FL areas so I can have a 10-15 minute discussion as you recommend?
I don't personally. Just walk into any big bank and ask for a commercial loan rep. Start with the big banks for practice. Then go to the smaller (commercial) banks (and credit unions) where you will have a better chance of success.
I'd be curious if you find even ONE multi-family in central Florida that has a potential ROI over 8%
From what I have discovered, this is one of the most competitive markets out there in Florida. There are literally thousands of investors lined up to buy a small multi-family. I know a hard money lender generating 30% to builders who can't build them fast enough, and even with the steep lending rate, they're still making money. I can't imagine how this is good for the end-buyer.
Welcome to BP
Jacksonville is not a bad market and south of you has some ok areas.
There are a lot of local lenders here in Central Florida prefer to lend on commercial. I would suggest chatting with them and sharing your business plan and criteria. Get an idea of their terms and their "sweet spot" or the amounts they like to lend and types of properties they like to lend on.
I wish you all the best Robert!
@Robert Schellenbarg Good luck with your multi-family investing. For commercial finance, local lenders are a good way to go. I've spoken with a couple lenders that are national and one interesting thing I learned is some will provide a lower interest rate if the loan amount (not purchase price) is over 500k. The difference I was quoted was over a full percentage point, so something to keep in mind. 25% down is fairly standard, but the mortgage term and amortization period differs.
Complete newbie question...
If I'm trying to do the same as @Robert Schellenbarg and start a conversation for a commercial loan (in advance of having something specific)... But I am in NY and am looking for a multi-family in other parts of the country... Would a NY bank still be my go-to? Or would I ultimately want to deal with a bank that is more familiar with the market I'd be going into?