I have some single family homes, triplex and 4 plex. I'm trying to get into commercial multi family real estate, specifically looking at around five units to 12 units. Can someone tell me which sources or books I can read that can break it down in terms of the steps and the lenders and what the lenders are looking for, and the process of closing? I've heard of the book by Michael Blank Financial freedom with real estate investing, but looking at the reviews it seems to talk more about syndications. I am not planning on doing any syndications right now. I just need some guidance on how to talk to lenders or what lenders are looking for in terms of rent income, loan to value, etc. for five units to 12 unit Multi family property.
Investor · Shelton, WA · Member since 2017 · 6k+ posts · 6k+ votes
3y
My twelve unit is way more profitable than my singles or duplexes. Having all your tenants under one roof just makes so much more sense. Contact some loan companies, anything but a chartered bank. I can't help you with financing specifics because I paid cash for mine.
Investor · Shelton, WA · Member since 2017 · 6k+ posts · 6k+ votes
3y
My twelve unit is way more profitable than my singles or duplexes. Having all your tenants under one roof just makes so much more sense. Contact some loan companies, anything but a chartered bank. I can't help you with financing specifics because I paid cash for mine.
I have some single family homes, triplex and 4 plex. I'm trying to get into commercial multi family real estate, specifically looking at around five units to 12 units. Can someone tell me which sources or books I can read that can break it down in terms of the steps and the lenders and what the lenders are looking for, and the process of closing? I've heard of the book by Michael Blank Financial freedom with real estate investing, but looking at the reviews it seems to talk more about syndications. I am not planning on doing any syndications right now. I just need some guidance on how to talk to lenders or what lenders are looking for in terms of rent income, loan to value, etc. for five units to 12 unit Multi family property.
Thank you!
Frank
Frank
We treat 5-8 unit properties just like 1-4 except the max ltv is 75%. It's a DSCR loan so the rents and the guarantor's credit are key to the transaction. As long as there's a 1.2% DSCR, then the loan works (sometimes we can go down to 1.0) on a 30 year fixed.
Real Estate Agent · Dallas, TX · Member since 2020 · 164 posts · 80 votes
3y
For the most part 5+ unit deals are the same as 1-4 unit deals. The only thing different will be loan type the property will qualify for. In some ways, I find it easier to deal with commercial loans. I believe Brandon Turner wrote two books on this (I'd start with the first one, The Multifamily Millionaire Part 1). Start talking to as many lenders as possible, that'll help you understand the process and different loan products.