Multi-Family and Apartment Investing

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Looking for a loan to buy a duplex in memphis

Posted Jun 22 2022, 10:01

Hi BP community,

I have a question and would like to receive feedback from those with experience. I am looking at a turnkey duplex in Memphis with a purchase price just under 100k, what type of loan should I be looking for, I have read about DSCR loans but not sure if there are other options.

Appreciate the feedback

Thanks

Luis

Memphis, Tennessee

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Kevin Luttrell
  • Lender
  • Orange County, CA
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Kevin Luttrell
  • Lender
  • Orange County, CA
Replied Jun 22 2022, 11:28

If you need the loan to be in your LLC, you'll need a DSCR or commercial loan. If you're fine with the mortgage being in your personal name, you can just get regular conventional financing. Conventional financing will give you better terms than DSCR or commercial.

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Aj Parikh
  • Rental Property Investor
  • Centreville, VA
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Aj Parikh
  • Rental Property Investor
  • Centreville, VA
Replied Jun 22 2022, 11:34

Look into kiavi.com. They do asset based lending 

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Replied Jun 22 2022, 13:28
Quote from @Aj Parikh:

Look into kiavi.com. They do asset based lending 


 Thanks AJ, already contacted Kiavi

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Replied Jun 22 2022, 13:40
Quote from @Kevin Luttrell:

If you need the loan to be in your LLC, you'll need a DSCR or commercial loan. If you're fine with the mortgage being in your personal name, you can just get regular conventional financing. Conventional financing will give you better terms than DSCR or commercial.


 Thanks Kevin, very helpful

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River Sava
  • Lender
  • Austin, TX
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River Sava
  • Lender
  • Austin, TX
Replied Jun 22 2022, 13:46

DSCR loans are a good bet but it might be a little tricky at that loan size / property value. For example, I'm a DSCR lender and our minimum property value is around $150k

Lender

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Andrew Garcia
  • Lender
  • Silver Spring, MD
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Andrew Garcia
  • Lender
  • Silver Spring, MD
Replied Jun 22 2022, 17:51

Hi @Luis Fernando Botero, as the others have said in the forum, you are probably looking for a DSCR loan.

Those are the easiest to use for investment properties. However, you are going to likely run into issues with that purchase price.

Conventional financing is likely a better option for this as it provides better rates and terms and has no minimum loan amount.

Additionally, if you are going to live in one unit, you can look into FHA loans.

Hope this helps! Let me know if I can be of any assistance.

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River Sava
  • Lender
  • Austin, TX
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River Sava
  • Lender
  • Austin, TX
Replied Jun 23 2022, 11:49

DSCR loans are a good bet but it might be a little tricky at that loan size / property value. For example, I'm a DSCR lender and our minimum property value is around $150k

Lender

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Greg Huegel
  • Lender
  • Greenville, SC
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Greg Huegel
  • Lender
  • Greenville, SC
Replied Jun 24 2022, 06:51

@Luis Fernando Botero, I would be more than happy to refer you to a DSCR lender that sounds like would be exactly what you are looking for! They have competitive rates and terms and their minimum property value for turn key rent ready properties is $75,000.

Just let me know!

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James Wachob
  • Real Estate Broker
  • Memphis, TN
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James Wachob
  • Real Estate Broker
  • Memphis, TN
Replied Jun 24 2022, 10:19

@Luis Fernando Botero I have connections to lenders in Memphis. I will send you a private message.

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Replied Jun 27 2022, 09:26

You can get a conventional mortgage on any property under 4 units. I really like Orion Federal Credit Union (I've closed dozens of deals with them) Security National is really well known for being well versed in the local market. Community mortgage is also excellent and has great customer service. The other big boys are Landmark Trust. Bank of Brighton is smaller, has more personalized service and has some flexibility (I could be wrong but I think they hold some of their loans as opposed to re-sell them to the post secondary market).

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Replied Jul 5 2022, 10:18
Quote from @Andrew Garcia:

Hi @Luis Fernando Botero, as the others have said in the forum, you are probably looking for a DSCR loan.

Those are the easiest to use for investment properties. However, you are going to likely run into issues with that purchase price.

Conventional financing is likely a better option for this as it provides better rates and terms and has no minimum loan amount.

Additionally, if you are going to live in one unit, you can look into FHA loans.

Hope this helps! Let me know if I can be of any assistance.


 Thanks Andrew

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Alex Evans
  • Memphis, TN
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Alex Evans
  • Memphis, TN
Replied Jul 5 2022, 13:21

Hello @Luis Fernando Botero

I second what @Andrew Garcia has stated above. 

I believe the purchase price of the property is going to be the hardest thing to overcome in terms of a DSCR loan.

Are you looking to put this property in your own name, or are you putting it into a corporation? 

I have plenty of connections with lenders that can help you here in the Memphis Market. Feel free to reach out with any questions!