Seeking Financing for a 10-Unit Apartment Building: Recommendations Needed!

Hartford, Connecticut
Multi-Family and Apartment Investing
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Seeking Financing for a 10-Unit Apartment Building: Recommendations Needed!

Jesson George
Member since 2023 · 9 posts · 3 votes

I'm in the market to acquire a 10-unit apartment building with a purchase price of $950,000. I find myself in need of a loan or lender who can provide a 25/30-year amortization with a fixed rate for the entire term or maybe with only a 1relock rate. Have any of you recently collaborated with a lender who offers such terms? what are the current interest rates?

Primarily, I'm leaning towards conventional lending, but I'm also considering the Debt Service Coverage Ratio (DSCR) loan type. Any insights or experiences with either option would be greatly appreciated.

If you've recently secured financing for a similar project or have recommendations for lenders who specialize in apartment building investments, please share your thoughts below. Your expertise could prove invaluable as I navigate this exciting but complex process.

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Robin SimonBusiness Member
Lender · Austin, TX · Member since 2022 · 5k+ posts · 4k+ votes
2y

Hi Jesson - in case you haven't come across this one, here is an article published last year on BiggerPockets on the Multifamily DSCR Loans options which may be good option for you - it breaks down the major differences and the pros/cons of each. Generally, the rate might be higher on DSCR Multifamily but counteracted with a superior 30-year fixed rate (fully amortizing or even IO for 10 years) which can actually have a bigger effect on monthly payment and takes away any balloon or floating rate risk.

https://www.biggerpockets.com/blog/multifamily-dscr-loans

[email protected]
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  • Robin SimonBusiness Member
    Lender · Austin, TX · Member since 2022 · 5k+ posts · 4k+ votes
    2y

    Hi Jesson - in case you haven't come across this one, here is an article published last year on BiggerPockets on the Multifamily DSCR Loans options which may be good option for you - it breaks down the major differences and the pros/cons of each. Generally, the rate might be higher on DSCR Multifamily but counteracted with a superior 30-year fixed rate (fully amortizing or even IO for 10 years) which can actually have a bigger effect on monthly payment and takes away any balloon or floating rate risk.

    https://www.biggerpockets.com/blog/multifamily-dscr-loans

    [email protected]
    Harpoon Capital514 Reviews
    WebsiteView Page
    2Reply
  • Robert Rixer
    Investor · Miami, FL · Member since 2015 · 355 posts · 268 votes
    2y

    Best bet is to talk to an experienced finance broker. They've probably been exposed to every type of financing term under the sun and can point you in the right direction. A question I would have for you is why you'd want to lock yourself into a long-term fixed rate right now?

    0Reply
  • Dallas Sauer
    Lender · Phoenix Arizona · Member since 2018 · 89 posts · 51 votes
    2y
    Quote from @Jesson George:

    I'm in the market to acquire a 10-unit apartment building with a purchase price of $950,000. I find myself in need of a loan or lender who can provide a 25/30-year amortization with a fixed rate for the entire term or maybe with only a 1relock rate. Have any of you recently collaborated with a lender who offers such terms? what are the current interest rates?

    Primarily, I'm leaning towards conventional lending, but I'm also considering the Debt Service Coverage Ratio (DSCR) loan type. Any insights or experiences with either option would be greatly appreciated.

    If you've recently secured financing for a similar project or have recommendations for lenders who specialize in apartment building investments, please share your thoughts below. Your expertise could prove invaluable as I navigate this exciting but complex process.


    We can do DSCR up to 10 units. Does the property need rehab or is it turn key? Are the units already rented? Feel free to DM me.

    2Reply
  • James Snelling
    Rental Property Investor · Seattle / Honolulu · Member since 2024 · 1 post · 0 votes
    2y

    I use a mid career multifamily lender out of the  greater Seattle area. DM me if you’d like an introduction.  I like Rob and his team as they can get me Freddie Mac money sometimes 10 yr with 2 yrs interest only. Happy to make the introduction if it sounds something that you’re interested in.

    Cheers.Happy to make the introduction if it sounds something that you’re interested in.

    Cheers, 

    Jim.

    0Reply
  • Jacob Sherman
    12 Penns Trail Suite 138 Newtown, PA 18940 · Member since 2023 · 1k+ posts · 319 votes
    2y

    Yes can do it 25% down on DSCR no income no doc . The best option to go with and simplest . Can be be in LLC

    0Reply
  • Devin PetersonBusiness Member
    Lender · Sarasota, FL · Member since 2022 · 2k+ posts · 664 votes
    2y
    Quote from @Jesson George:

    I'm in the market to acquire a 10-unit apartment building with a purchase price of $950,000. I find myself in need of a loan or lender who can provide a 25/30-year amortization with a fixed rate for the entire term or maybe with only a 1relock rate. Have any of you recently collaborated with a lender who offers such terms? what are the current interest rates?

    Primarily, I'm leaning towards conventional lending, but I'm also considering the Debt Service Coverage Ratio (DSCR) loan type. Any insights or experiences with either option would be greatly appreciated.

    If you've recently secured financing for a similar project or have recommendations for lenders who specialize in apartment building investments, please share your thoughts below. Your expertise could prove invaluable as I navigate this exciting but complex process.

     HI Jesson, Local to you in Middletown! There a ton of great local options id be happy to connect you with. 

    [email protected]860-538-3672
    ProAlpha Capital56 Reviews
    WebsiteView Page
    0Reply
  • Benjamin AakerPro Member
    Rental Property Investor · Brandon, SD · Member since 2015 · 1k+ posts · 1k+ votes
    2y
    Lots of lenders here who will know more, but my personal experience is that there are a lot of great promises made about how great a loan you can get and then the switch happens. Probably not the lenders posting here but make sure you ask the right questions. I've purchased multiple deals in this price range.
    In the volatile market we have today a fixed rate loan will carry a high rate if you can find one. There will likely be a prepayment penalty involved as well. If you aren't experienced, you will have trouble getting a DSCR loan. Conventional loans will require a significant down payment so that you can get the cash flow you need. They will likely come with a 5 year balloon.
    Talk to a lot of lenders but tell them exactly what you need up front so you don't waste a bunch of time.
    0Reply
  • Jesson George
    OP
    Member since 2023 · 9 posts · 3 votes
    2y
    Quote from @Benjamin Aaker:
    Lots of lenders here who will know more, but my personal experience is that there are a lot of great promises made about how great a loan you can get and then the switch happens. Probably not the lenders posting here but make sure you ask the right questions. I've purchased multiple deals in this price range.
    In the volatile market we have today a fixed rate loan will carry a high rate if you can find one. There will likely be a prepayment penalty involved as well. If you aren't experienced, you will have trouble getting a DSCR loan. Conventional loans will require a significant down payment so that you can get the cash flow you need. They will likely come with a 5 year balloon.
    Talk to a lot of lenders but tell them exactly what you need up front so you don't waste a bunch of time.

     Yes agreed. What are some questions you ask? Best rate I've gotten so far is high 6 and low 7's with 1.5point fee in a 30yr.
    I've gotten one lender willing to lend. I'm going with the full doc route as my finances are straight and have no issues disclosing it. I am also able to secure lending with 20% down which was big for me because now I don't need to have a partner involved.  I am just waiting for an appraisal to come back to pull the trigger.

    0Reply
  • Jesson George
    OP
    Member since 2023 · 9 posts · 3 votes
    2y
    Quote from @Devin Peterson:
    Quote from @Jesson George:

    I'm in the market to acquire a 10-unit apartment building with a purchase price of $950,000. I find myself in need of a loan or lender who can provide a 25/30-year amortization with a fixed rate for the entire term or maybe with only a 1relock rate. Have any of you recently collaborated with a lender who offers such terms? what are the current interest rates?

    Primarily, I'm leaning towards conventional lending, but I'm also considering the Debt Service Coverage Ratio (DSCR) loan type. Any insights or experiences with either option would be greatly appreciated.

    If you've recently secured financing for a similar project or have recommendations for lenders who specialize in apartment building investments, please share your thoughts below. Your expertise could prove invaluable as I navigate this exciting but complex process.

     HI Jesson, Local to you in Middletown! There a ton of great local options id be happy to connect you with. 

    are you a lender or broker?
    0Reply
  • Joshua ChristensenPro Member
    Real Estate Broker · Albuquerque, NM · Member since 2015 · 281 posts · 232 votes
    2y
    Quote from @Jesson George:
    Quote from @Benjamin Aaker:
    Lots of lenders here who will know more, but my personal experience is that there are a lot of great promises made about how great a loan you can get and then the switch happens. Probably not the lenders posting here but make sure you ask the right questions. I've purchased multiple deals in this price range.
    In the volatile market we have today a fixed rate loan will carry a high rate if you can find one. There will likely be a prepayment penalty involved as well. If you aren't experienced, you will have trouble getting a DSCR loan. Conventional loans will require a significant down payment so that you can get the cash flow you need. They will likely come with a 5 year balloon.
    Talk to a lot of lenders but tell them exactly what you need up front so you don't waste a bunch of time.

     Yes agreed. What are some questions you ask? Best rate I've gotten so far is high 6 and low 7's with 1.5point fee in a 30yr.
    I've gotten one lender willing to lend. I'm going with the full doc route as my finances are straight and have no issues disclosing it. I am also able to secure lending with 20% down which was big for me because now I don't need to have a partner involved.  I am just waiting for an appraisal to come back to pull the trigger.

     Hey Jessan, another option with very flexible options who will go for 30 year is @LaMancha Sims who happens to be part of the Bigger Pockets Community.  Check him out as an option.  

    1Reply
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