Financing 10 unit Apartment

[Michael R.]

Well now that we have this new forum I figured I would ask this here!

I have been looking around at larger multi families the last few months. What requirements do lenders have for these properties? Will they consider income generated from the property when looking at the loan?

I have 13 houses and am considering selling off some and reinvesting in something larger. Problem is my income is not constant and I only make about 35k from work outside of RE.

The properties I am looking at are fully rented and pretty much turn key and in the range of 175-200k.

Hopefully some people on here that are knowing can provide some insight on what will be required for me to get a loan.
Thanks!

[Darryl Dahlen]

I can only speak to what the lender I use for small commercial deals can offer, but they are actively lending and are a reputable bank.

LTV: 70% for non-occupied properties. 75% for owner-occupied.
Credit score: minimum 700
DSCR:1.2
Loan amount: up to 500K

Rates are in the 5s for a 5/30 and 4s for a 3/30. Longer terms are available, but the rates are higher.

Lender likes to see two years of personal and business tax returns, rent roll, proof of money to close, articles of incorporation, P&L, etc.

The lender is running a special until the end of June where the only lender fees are title, escrow, and a small underwriting fee (which is applied to your first payment if the loan closes). This lender does not require an appraisal. That may seem odd, but they do their own internal valuation in lieu of an appraisal. Still, omitting the appraisal saves the borrower a lot of money which makes this a relatively cheap loan to obtain.

The loan does not have to close in June to capitalize on the special. I just have to submit the application before the end of June. Otherwise, there is a lender origination fee of 1%.