What to do with 70k?

Question

Hey Guys,

Can I get into commercial real estate (>4 unit) with 70k (from house hacking)? I took out a heloc on my duplex to purchase another property. I found a property for $299,900 but was told by bank that the 70 was not enough and that I need coborrower with more income. I reeaaally want to do commercial but is it the wrong timing, wrong building or wrong bank? Should I try another bank or just try a large residential (4plex). Is it possible to get a 5 unit with 70k all in. Need some advice.

Jheanell R. · Answer

Thanks @Greg I'm open to syndication. Hopefully I'll learn some of it too. How can I get started with that? I'll also try looking around for cheaper 5 units.

Jheanell R. · Answer

@briangerlach I got the heloc from a duplex I house hacked. Thanks for the advice.

Greg Scully · Answer

@Jheanell R. - Depends on your market. I've seen 5+ units go for under 300K, which is what 70K might bring you at 20% down plus fees.  You could also partner with someone or invest in a syndication.I would also talk to multiple lenders, sometimes smaller community banks and credit unions have more flexible terms.

Brian G. · Answer

@Jheanell R. you are going to need 25% down + closing costs + 6 months of PITI payments for a NOO investment property on a conventional loan for 2-4 units. You will likely need more down (ie 30%) for a 5 unit or bigger. Have you thought about house hacking? This is where you buy a 2-4 unit with 5% down, live in one unit and rent out the others. Ideally you lower or eliminate your housing costs which in turn accelerates your savings rate. It's a great strategy.