Macomb, MI · Member since 2016 · 30 posts · 6 votes
Hi There!
We recently did our first successful BRRR with a 3 unit multifamily. We cashed out into an FHA and would like to repeat, but we are ineligible for another residential loan.
My question is , could we find a 5-10 unit building and refinance into a COMMERCIAL loan? We would buy the units with hard money, fix it up, and then refinance into a commercial loan and repeat again.
We are trying to learn more about commercial loans in the meantime!
Investor · Houston, TX · Member since 2013 · 195 posts · 102 votes
7y
It can be done. My group has done this with hotels. Example, we purchase a $6 million hotel, run it well and then get a $6 million loan assuming the metrics pencil out. It can be done on smaller deals, but you just have to make sure the loan metrics work. The bank has to have it underwrite well.
Rental Property Investor · Charlottesville, VA · Member since 2012 · 1k+ posts · 726 votes
7y
@Michelle Chowan yes, you sure can. All I use these days is commercial financing regardless of if I'm doing a house or a small apartment building. There are a lot of advantages to commercial like there's no rules on seasoning so you can sometimes turn the refinance around much quicker. And once they know you, very little paperwork.
The downside is that the terms are not as good, usually 20 year ammort with a 5 year term for me. However there are a few newer lenders around now that will do more typical 30 year loans but their interest rates are higher.