Obtaining A commercial loan on a $200,000 property
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?
Hard money lender
What part of upstate Ny?
Catskills New York
+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
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.
@Moshe Romand google Visio Lending, they're legit.
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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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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.
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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.
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.
@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.
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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.
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Quote from @Moshe Romand:see comment above
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?
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.
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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