Financing Multi-Family Properties (5+ Units)

[Riki Thomas]

All,

I'm looking for advice on financing multi-family properties in the Alabama market. What financing terms should I ask for or expect for these types of deals? Based on my research, the financing terms will be based on the LTV and debt coverage ratio of the property.

All input is appreciated.  Thanks so much.

Riki

[Jaysen Medhurst]

Correct, @Riki Thomas. Most commercial lenders want to see 25% down and a DCR of 1.2 or better. It pays to shop around but for reference, yesterday a commercial lender quoted me the terms below:

20-year amortization, adjusting every 3, 5, 7 or 10 years.
Today the rates would be:

• 3 year variable at 4.25%
• 5 year variable at 4.35%
• 7 year variable at 4.50%