Financing Multifamily (5+ Units)

9 Replies

Hello all,

Currently looking at multifamily properties to dive into real estate. Properties range from 8-16 unit. I’m curious as to what other BP members have found regarding financing. My general understanding is I’m essentially looking at 30% and around 2% over residential mortgage rates. Is this accurate?

Also, does anyone have any suggestions for who to reach out to for a quote on multifamily financing? Thanks!

Best,

Zach

Most banks will offer 25% down, rates as of recent 5-5.75% depending on appetite. 20-25 year am schedule.  Rates on Non-bank options under 1m tend to be a higher.  Over 1m you get into agency debt which depending on product you can get below 5%.

you can contact wellsfargo and ask for their commercial bank department. they have loan up to $750k with 20% down at 5% . rate actual cheaper than residential 2-4 unit. 

@Zach Bollman Commercial loans, which is the bank department to talk to, are different in that you can get 20-25 yr. amortization but they usually balloon in 5-10 yrs. and then you have to refi. The longer the term the rate goes higher but you don't have as much interest rate risk. Those banks that are looking for more business will be willing to go longer before the balloon. A good local banker is a valuable asset in this biz. Credit unions also do commercial loans but those around here tend to have shorter amortization periods.