Hi follow bigger pocketers! 

I have found several buildings that I would like to purchase but my big question is how to finance it. This is my first investment purchase on paper (I own but not on mortgage) and I am a real estate agent. I have waited 2yrs so I can show steady income and I'm ready to jump in head first. I could be purchasing 2 or 4 properties that all close to each other. They are all good investments on paper (used the rental calculator) and 2 of them already have good tenants in place. These buildings are not owned by the same person (although two are under one owner). 

The prices vary from $80k-$175k (ideal purchase price so my numbers work). 

My big question is how to finance it. Use individualized conventional mortgages and take advantage of the great interest rates or use a commercial loan to wrap all the properties together but risk refinancing in 5yrs? Any and all help on this would be greatly appreciated!

How many units are in these buildings ?  That determines residential or commercial financing.  Kind of also sounds like you're trying to bite off more than you can chew for your first deal. Buy one property first and see how it goes.

@Account Closed There are 2 units in each of these buildings with "in-law" garden units. From what my lender tells me is we can group all of the properties together and that would result in the possibility of using a commercial loan. Might be best to do individualized conventional loans though...that's the big question. 

I have managed 3 investment properties in the area and I'm confident that I'll be good to go if the numbers pan out. I am going to look at the properties tomorrow I haven't seen them yet. I have spoken to the agents pretty thoroughly.

Good luck. Do your own due diligence and crunch your own numbers.  Don't rely on info from others. 

I agree with you and I will. First step is viewing the properties with my contractor. Second would be to re-calculate my numbers. Third would be to make sure financing is nice and solid. Thank you!

Hi @Edouard Pierre , you are on the right track ... I would purchase them separately as there is a chance that if you buy it in a bundle and one of the four properties have a problem the whole bundle will be at risk. 

Best of luck!

@Edouard Pierre  You might be best to put each property separate commercial loans.   

25% down with no personal income verification. Just using the properties DSCR.

Conventional financing can be much hard bc of the DTI restriction and with you being self employed makes it harder bc they will use your 2 yr avg AGI on your personal taxes.

Just my thoughts.  It's been my experience that I was able to get commercial deals funded much easier.

@Jason Million These properties are 2-flats with in-law basement units. I wouldn't be able to get individual commercial loans unfortunately...hence the bundling option. 

@Edouard Pierre You can get commercial loans for 2 flats .. Commercial loans are not restricted 5+ units ..

Also bundling them may sound like a good option but if you ever have to sell one of them, it will be a huge pain

@Avi Garg Well that's great news...the main downside I get is the refinancing in 5yrs since interest rates are so competitive at the moment? 

@Edouard Pierre ,

Whelp, here's when you find out if the mortgage person you've been referring your REI clients to is truly REI friendly.

Buy them all at once, 25% down on each, concurrent closings -- meaning all 4 mortgages close and fund on the exact same day, using rental income from all of them to qualify. If at the end of this you will have more than six financed properties, it'll be 30% down on each.

@Jason Million Thank you for the newbie lesson on commercial loans. Spoke with my lender and we're rock n' rolling! Thank you again! 

@Avi Garg I agree with you on the bundling and spoke with my lender for the individualized 2-flat purchases - two offers in at the moment! 

@Chris Mason Great idea and thank you!