Financing Larger Purchases in Milwaukee Wi - Commercial Lending?

3 Replies

I have been evaluating larger deals. An example is the attached numbers. It is a portfolio purchase for 10 properties. 

My question is: How is a relatively new investor able to finance these larger deals to scale my operation quickly? 

I have shared these exact numbers with a few commercial lenders and have been turned down with their reasoning being lack of experience. For example, First Federal bank said they require 3 years of proven cash flow on properties under my control before they would consider me for financing of a deal as large as the example I have provided here. 

I understand I am new with only 1 duplex deal and 1 land contract deal under my belt, but when I come across deals that involve many properties I want to be able to make an offer and stand behind what I offer if it is accepted. 

Does anyone have any recommendations or thoughts? 

Thanks in advance! 

Crawl before you walk. Three years will go by in a flash. Buy profitable SFR deals using conventional loans. Those are your best loans, in any case. These commercial loans will not be 30 year fixed rate loans like you can get for conventional. And they will require higher down payments. So, build your portfolio a house or two a year for the next few years, then look at bigger deals.

I added the example I spoke about. I forgot to attach the snapshot. 

I appreciate the feedback! I am aware of the terms of commercial loans. This institution requires 25% down 20 yr amortization. 

But if the numbers work out to still have a good return then why would the shorter terms and higher down  payment be a concern? 

I am still interested if others have been able to do it early on in their investing career and how they did it. 

Originally posted by @Alex Witte :

I added the example I spoke about. I forgot to attach the snapshot. 

I appreciate the feedback! I am aware of the terms of commercial loans. This institution requires 25% down 20 yr amortization. 

But if the numbers work out to still have a good return then why would the shorter terms and higher down  payment be a concern? 

I am still interested if others have been able to do it early on in their investing career and how they did it. 

 I went through this a few years ago.  I had 3 properties in Chicago and wanted to buy 10 in Milwaukee.  I ended up paying a commercial broker to get to my bank.  I will PM you the info

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