5 unit Commercial Loan
Hi All
I am currently looking into a 5 unit residential property (no commerical space here) in Philadelphia. I am very new to the game so any tips here would be great. Just looked at the property this weekend with my partner in crime and we both agreed this property is worth diving into.
However, as you may suspect with my youth (23 years old) I do not have a great grasp on the commerical loan realm. Needless to say, I don't have much expercience in real estate, besides watching my dad build a mini empire of houses. To give you a rough vision of this property, it is sitting in a C+ to B- area (subject to one's opinion obviously) but is by no means a scary neighborhood. The property has been completely renovated as of August 2013, new water heaters, new windows, new kitchens, refurbished common stairwell with nice wood finish and a nice stone front look from the exterior. Currently, there is one vacant 2 bedroom unit, one occupied 2 bedroom unit, two occupied 1 bedrooms, and 1 occupied stuido (top floor but nice space, i would estimate 600-700 sq ft). Fully rented out this property has a potential income of $3,400/ month.
Enough of the details i dont want you guys stealing my property haha, my real question is what do you think my best option for financing would be? Will a commerical loan be too difficult to attain, given my lack of a track record/ excperience and the fact i will only be able to put down 30%? My plan is to explore seller financing possibilites while i hunt down a commerical loan that will satisfy my needs. You may be thinking at this point, why doesnt this kid ask his pops? I have and I have him interested but he really wants to see me get this done on my lonesome, not cool right? But i respect that. Also, if you are wondering, my "partner" is my a good friend who is my age and has been persuaded by me to pursue this endeavor, he's got some cash.
At listing price we are looking at potentially 82K down (at 30%), which is definitely a bit of strech for our personal funds but we have been looking at properties for a while now and this is definitely the one to make a move on.
Let me know what you guys think. Appreciate any insight or advice on the matter. I only ask that you dont reply saying this is out of your league because I know i can make this work. I have a lot of resources at my disposal that i didnt discuss here (mainly family).
Thanks for reading.
-Bill
