Real Estate Agent · Wellington, FL · Member since 2019 · 33 posts · 19 votes
I'm looking at possibly doing a 1031 on some land I'm selling. I'm either looking for a nice home for Airbnb or I'm more likely going to find a multi-family for long-term rental. I had some interest in a 5-plex. It seems like about 1/2 of my local banks don't want to do commercial loans. Once you go over a 4-plex its a commercial loan, but due to the amount I will likely be buying a 5-plex or larger in my market. I have a few questions regarding commercial loans, I was hoping to get some input. The purchase price will likely be 6-800k. So far, the best options have been 15 year fixed 4-5% or a 5/5 balloon matures in 10 years amortized over 25 years 3.75%-4.75%. 20% down on both.
What is the standard minimum down payment?
Is it possible to get a 20, 25, or 30 year fixed rate?
What kind of rates are you getting?
Is the loan based on the rental income of the purchase property? Does my personal income have a large input in getting approved?
Those terms are pretty good for that size of a loan. If you are able to go a bit bigger, once you get into the loan size of $1mm+, you can qualify for agency debt. This is 30 year am, fixed for up to 15 years, 2.75-3.5%
The terms you have mentioned are pretty standard with banks and commercial properties; 20%-25% down; 5-15 year terms; amortized over 20-25 years. That being said; I have found 25 year term, fully amortizing commercial loans through local banks before. I called/emailed over 100 banks to find that program but they do exist. Start with banks you have relationships with and then reach out to all local banks and credit unions within a 1 hour drive of the property. You might be surprised at what you find.
Those terms are pretty good for that size of a loan. If you are able to go a bit bigger, once you get into the loan size of $1mm+, you can qualify for agency debt. This is 30 year am, fixed for up to 15 years, 2.75-3.5%
Most 5+ family deals under 1MM will be 5/1 Arms with 30 yr amortization. You may be able to get a 25-30 year fixed once you get over 1MM. Rates will probably be in the 5+% range.
@Todd Dexheimer how does one go about getting agency financing for over 1MM please ?
Contact commercial mortgage brokers. There are a bunch of companies out there that focus on these types of loans. Companies like Meridian Capital, Old Capital, Berkadia, CBRE, Capstone, Greystone, Northmarq, Walker and Dunlap, Eastern Union, etc.