Mc Gregor, TX · Member since 2018 · 41 posts · 35 votes
We are looking for a loan for a small 6 unit apartment building. We are in Texas, it is in KCMO. One lender is 8%, one is 7.56% but a 30 year and one is mid to high 6%. Others said no for various reasons that we can't change, like where we live. The loan will be about $170ish and I realize that is part of the issue. Any suggestions? Thanks!
Have you spoken with banks and credit unions near the property?
What is the expected loan to value ratio (LTV) and debt service coverage ratio (DSC/DSCR)?
What fees are you being quoted?
What fixed rate period are these rates for?
What kind of prepayment premium/penalty is being quoted?
In general, commercial loans less than $1 million are expensive because it takes about the same amount of work to do a $1 million loan as a $100k loan and the lender has to make up for the fixed costs somewhere.
@Jennie W. we purchased a six unit building similar to this just under two years ago. We have a community bank we work with that has done most of our long term hold deals. It's a 20 year term at 5% but our cash flow is very strong and it's not in a bad area. I do not know if they lend to out of state investors, but worth a shot. PM me if you want their info.