I'm looking to purchase my first 10-unit apartment building in Ohio.  I live in California, so I am not familiar with the local banks in Ohio.  I did reach out to 1 local bank which was recommended by the listing agent and they are currently not lending to out of state investors. When I did an online search for commercial multifamily lenders, most have a minimum lending requirement of $1M and I don't need that much.  How do I find a commercial multifamily loan that is willing to lend less than $1M?

@Mary Lopez I'm also a California resident investing the mid west.  Multi family loans under $1,000,000 are certainly more difficult to obtain because they don't meet the minimums of most companies and most local banks aren't so welcoming to out of state investors.  However, I know of some great wholesale nationwide providers/private companies. They'll go as low as $250,000.  Rates will be a little higher (5%/6% range) but the cool thing is that you can often find these on 30 year fixed terms unlike the short term balloons the local bank would offer. 

@Alex Bekeza Would you mind sharing those wholesale nationwide providers/private companies? I am looking at a 24 unit multifamily that will end up being close to 700k. Thank you for the help!

@Collin Schulte I sent you a message. 

Currently reading Multifamily Millions and David Lindahl recommends using a mortgage broker. They typically charge 1% of the financed amount but should be able to find a lender to suit your needs and hopefully avoid situations where financing falls through at the last minute.

@Mary Lopez It definitely depends on your scenario and the details. You can still reasonably expect to find financing for those asset types. Is it prime? no. Does it get the deal done & a building in your name? Sure does.

@Mary Lopez I invest in Cincinnati and have some contacts I can share with you for banks that provide commercial lending on multi-families.

@Mary Lopez call 5-10 local community banks or credit unions where the property is located and you’ll find at least one that can work with you.

@Mary Lopez I helped a California buyer purchase a 70-unit multifamily in Columbus, OH last year so it can be done.

Originally posted by @Chris McIntosh :

@Mary Lopez I helped a California buyer purchase a 70-unit multifamily in Columbus, OH last year so it can be done.

I'm looking for 10+ units in Columbus as well, can you help me buy a 70 unit in Columbus? 

@Mary Lopez

You have to ask around to local commercial lenders or some of the larger Finance of America type lenders. Being out of state they’ll need strong balance sheets and probably be more conservative on underwriting.

@Mary Lopez

There are second tier lenders out there (non-banks) that will do small balance commercial.  Some will go down as low as $100,000.  

@Brianne Leichliter  I'd love to get those contacts!  Thanks!

@Mary Lopez - second on using a mortgage broker.  I tried for months to find a lender for MF (10+ unit) before connecting with a broker.  We used the broker Stacksource (found on BP resources) and they found us multiple lenders.  And I believe BP Pro's get a discount on Stacksource's fee.  Good luck!

Originally posted by @Chris McIntosh :

@Mary Lopez I helped a California buyer purchase a 70-unit multifamily in Columbus, OH last year so it can be done.

 I just purchased a 24 unit in Columbus, Ohio. Please help me purchase a 70 unit too!

@Mary Lopez I recommend most investors skip multifamily properties that don't qualify for agency (Fannie/Freddie) or HUD financing.

Debt is going to make up 70%+ of your entire capital stack - it's critical to find the best loan/lender with the best terms possible. 

Why pay 5%-6% on a 20-25 year am 5 year term when you can pay 2.25%-3.5% on a 30-35 year am 10-35 year term?

I know this may not seem possible, and probably not the answer you were looking for, but it would be worth partnering with another active investor, bringing in a passive investor(s), or even waiting until you have enough capital to deploy into the right deal. 

Most investors focus on what can they buy now with their available capital instead of simply what is the best investment for their capital without limitations.