Obtaining A commercial loan on a $200,000 property

Upstate New York, New York
Private Lending & Conventional Mortgage Advice
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Obtaining A commercial loan on a $200,000 property

Moshe Romand
Monsey, NY · Member since 2016 · 2 posts · 0 votes

i'm looking at a six unit property in upstate New York. They're asking $200,000, I need like $300,000 in repair and ARV of like $700,000. The problem I'm running into is that a residential broker won't give me a mortgage due to the factor it's multi family and a commercial mortgage broker is claiming that it's too small for mortgage. Anybody have any ideas how to finance such a deal?

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Stephanie P.Pro Member
Washington, DC Mortgage Lender/Broker · Member since 2016 · 4k+ posts · 2k+ votes
4y

@Moshe Romand

You've got a couple of things going against you here.

The loan size is too small for regular lenders. The cost of the renovation is 1.5 x the cost of the property. It's in the Catskills so it's more than likely going to be considered rural and the LTV is pushing past 70% of the ARV

If you can't get the numbers lower and then get financing from a local bank or credit union, I'm not sure this one gets done.

Best of luck

Stephanie 

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  • Mordy Chaimovitz
    Investor · Chicago · Member since 2022 · 128 posts · 85 votes
    4y

    Hard money lender

    0Reply
  • Brianne LeePro Member
    Catskill, NY · Member since 2013 · 9 posts · 1 vote
    4y

    What part of upstate Ny?

    0Reply
  • Moshe Romand
    OP
    Monsey, NY · Member since 2016 · 2 posts · 0 votes
    4y

    Catskills New York

    0Reply
  • Brianne LeePro Member
    Catskill, NY · Member since 2013 · 9 posts · 1 vote
    4y

    +1 (518) 248-5884
    Imelda

    National Bank of Coxsackie 

    I recently had a good experience doing a cash out refi of a non owner occupy rental via a business loan with Imelda. Maybe she can help you

    0Reply
  • Kevin Luttrell
    Lender · Orange County, CA · Member since 2019 · 299 posts · 255 votes
    4y

    If you're trying to BRRRR this and need to finance the rehab, most fix and flip lenders will be able to finance the purchase and rehab for you.

    For permanent financing, over 4 units rules out all normal conventional lenders. You'll have to keep calling around - there will be a local community bank or credit union that can do it no problem. You're not as likely to find 30 year fixed financing though. More likely 15yr-25yr amortization with an adjustable rate. 

    0Reply
  • Anthony Vargas
    Elk Grove, CA · Member since 2018 · 24 posts · 3 votes
    4y

    @Moshe Romand google Visio Lending, they're legit.

    0Reply
  • Stephanie P.Pro Member
    Washington, DC Mortgage Lender/Broker · Member since 2016 · 4k+ posts · 2k+ votes
    4y

    @Moshe Romand

    You've got a couple of things going against you here.

    The loan size is too small for regular lenders. The cost of the renovation is 1.5 x the cost of the property. It's in the Catskills so it's more than likely going to be considered rural and the LTV is pushing past 70% of the ARV

    If you can't get the numbers lower and then get financing from a local bank or credit union, I'm not sure this one gets done.

    Best of luck

    Stephanie 

    1Reply
  • Stephanie P.Pro Member
    Washington, DC Mortgage Lender/Broker · Member since 2016 · 4k+ posts · 2k+ votes
    4y
    Quote from @Anthony Vargas:

    @Moshe Romand google Visio Lending, they're legit.


     Visio is legit, but they won't do rural or construction loans on commercial properties that I know of.  Catskills is probably considered tertiary market at best and ultimately rural.

    0Reply
  • Ryan Hehman
    Realtor · Washington, DC · Member since 2013 · 91 posts · 32 votes
    4y

    I think it's possible that a commercial lender would take this on as an acquisition/bridge scenario, but more specifics about the property are needed. Feel free to DM me for more info.

    0Reply
  • H. Jack Miller
    Lender · Boca Raton, FL · Member since 2014 · 250 posts · 133 votes
    4y

    There are plenty of private lenders who would do this, from what I am hearing. I dont think I can say here as i dont think we are allowed to self promote, but if you contact me I can let you know.

    0Reply
  • Nate Monson
    Real Estate Agent · Albany, NY · Member since 2017 · 309 posts · 149 votes
    4y

    @Moshe Romand this feels like a classic hard money scenario to me. If you can find someone who will fund the purchase price and rehab for a lesser interest rate than a hard money lender then I would go with them. But short term hard money feels like the best option to me for you situation.

    0Reply
  • Erik EstradaBusiness Member
    Lender · Member since 2022 · 6k+ posts · 1k+ votes
    4y

    There are fix and flip loans programs available. The minimum loan amount is $75k and they can finance 100% of the repairs. Rates are generally less than what hard money lenders would quote you. 

    [email protected]818-269-7983
    LuxePrivate Investments LLC 572 Reviews
    WebsiteView Page
    0Reply
  • Erik EstradaBusiness Member
    Lender · Member since 2022 · 6k+ posts · 1k+ votes
    4y
    Quote from @Moshe Romand:

    i'm looking at a six unit property in upstate New York. They're asking $200,000, I need like $300,000 in repair and ARV of like $700,000. The problem I'm running into is that a residential broker won't give me a mortgage due to the factor it's multi family and a commercial mortgage broker is claiming that it's too small for mortgage. Anybody have any ideas how to finance such a deal?

    see comment above 
    [email protected]818-269-7983
    LuxePrivate Investments LLC 572 Reviews
    WebsiteView Page
    0Reply
  • Steven Foster Wilson
    Rental Property Investor · Columbus, OH · Member since 2017 · 3k+ posts · 3k+ votes
    4y
    Quote from @Moshe Romand:

    i'm looking at a six unit property in upstate New York. They're asking $200,000, I need like $300,000 in repair and ARV of like $700,000. The problem I'm running into is that a residential broker won't give me a mortgage due to the factor it's multi family and a commercial mortgage broker is claiming that it's too small for mortgage. Anybody have any ideas how to finance such a deal?


    Use a HML. Short term construction loans.

    0Reply
  • Mike Klarman
    Specialist · NJ · Member since 2022 · 1k+ posts · 650 votes
    4y

    A hard money lender will fund this for you given:

    1) your credit is decent 

    2) comps support the ARV

    3) this may be listed as a “heavy rehab” since the rehab budget exceeds as-is value.  They may want to deduct 5% - 10% of you purchase leverage.  

    4) you have some fix and flip experience.  Can’t be a 0 for experience on a project like this.

    But I’ve done deals like this where the work costs more than the property.

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