6 unit multifamily Apartment Purchase
I am looking at purchasing a 6 unit apartment building in Brooklyn NY and the seller is willing to sell it at 475k!!! I do not see many lenders who I can go to for loan so I'm having trouble finding information. Also if I am living in one of the units, are there any incentives i.e. down payment help? I would be considered a first time home buyer being the last house I owned was 3 years ago. Does NY have any incentives for ppl like me wanting to buy a 6 unit? I guess I'm just looking for direction on how to go about this purchase
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@Aneisha Christie, since this is 5+ units it is considered "commercial" and not "residential." That has a few implications, a couple of which @Bjorn Ahlblad eluded to:
- The property will require a commercial loan with 20-25% down and likely higher rates. Without a DP in that range, prior experience, and 6-12 months of reserves, a commercial loan will be nearly impossible to obtain.
- It will not qualify for any kind of first-time buyer or down-payment assistance.
- Many commercial mortgages explicitly prohibit owner occupancy.
A partnership may be an option, but I think the first thing you have to ask yourself is why the owner is willing to sell a 6-unit Brooklyn apartment building for only $475k? RE is still very hot right now, despite COVID-19, and there are surely plenty of investors out there who would pay much more than $80k/unit. Something is going on and best to completely understand what before moving forward.