Financing 25 unit complex

[David Wasiloski]

I found a 25 unit property in Louisiana that cash flows well but it needs some updating.  Asking 1.2mil.  I can cover 20% down but is anyone aware of a product/lender where I can put down 15% or 10%?  I would prefer to put less down and start cleaning up this property right away.   I don’t have all the answered but I’m here and open to ideas……

Owner financing is not an option.  I don’t own any like properties but have been a landlord for the last 10years. My credit hovers around 800

monthy income is 16k

P&I - TBD

Monthly expenses(taxes, trash, insurance ect.) estimated to be 1700.

[Erik Estrada]

Quote from @David Wasiloski:

I found a 25 unit property in Louisiana that cash flows well but it needs some updating.  Asking 1.2mil.  I can cover 20% down but is anyone aware of a product/lender where I can put down 15% or 10%?  I would prefer to put less down and start cleaning up this property right away.   I don’t have all the answered but I’m here and open to ideas……

Owner financing is not an option.  I don’t own any like properties but have been a landlord for the last 10years. My credit hovers around 800

monthy income is 16k

P&I - TBD

Monthly expenses(taxes, trash, insurance ect.) estimated to be 1700.

This is possible if the seller is wiling to carry the remaining 15-20%. Most commercial lenders will cut you off at 70% LTV for long term financing.

You can also get a higher leverage on a bridge loan by cross collateralizing with your other investment properties.

[Erik Estrada]

Quote from @David Wasiloski:

I found a 25 unit property in Louisiana that cash flows well but it needs some updating.  Asking 1.2mil.  I can cover 20% down but is anyone aware of a product/lender where I can put down 15% or 10%?  I would prefer to put less down and start cleaning up this property right away.   I don’t have all the answered but I’m here and open to ideas……

Owner financing is not an option.  I don’t own any like properties but have been a landlord for the last 10years. My credit hovers around 800

monthy income is 16k

P&I - TBD

Monthly expenses(taxes, trash, insurance ect.) estimated to be 1700.

This is possible if the seller is wiling to carry the remaining 15-20%. Most commercial lenders will cut you off at 70% LTV for long term financing.

You can also get a higher leverage on a bridge loan by cross collateralizing with your other investment properties.

[Jason Bott]

@David Wasiloski you will want to firm up the insurance pricing.  Chances are your rate will be 25%-50% higher than the historical expense or estimate.  

[David Wasiloski]

I got a new quote

[Steven Foster Wilson]

Quote from @David Wasiloski:

I found a 25 unit property in Louisiana that cash flows well but it needs some updating.  Asking 1.2mil.  I can cover 20% down but is anyone aware of a product/lender where I can put down 15% or 10%?  I would prefer to put less down and start cleaning up this property right away.   I don’t have all the answered but I’m here and open to ideas……

Owner financing is not an option.  I don’t own any like properties but have been a landlord for the last 10years. My credit hovers around 800

monthy income is 16k

P&I - TBD

Monthly expenses(taxes, trash, insurance ect.) estimated to be 1700.

 You could look for a hard money lender then when it is finished you can refinance out of it. Often hard money loans have a construction cost you can take out as well. 

[David Wasiloski]

Can your recommend any?

[Givo Aghasi]

@David Wasiloski It is possible if the seller is willing to finance the remaining.  Most lenders will go up to 75% LTV for long term financing and 90% CLTV. You still need to make sure the property can DSCR.

[Andres Murillo]

Gotta figure out the property's DSCR rate first. Your downpayment will be entirely based on the DSCR for the property. Most lenders have specific DSCR metrics that they advertise - check the property's financials against that DSCR to figure out the down payment you'll need.

[Nick Belsky]

@David Wasiloski

Just like with residential 1-4 Unit, there are fix and flip loans for multi-family as well. I don't believe I've seen any go up to 90LTC recently, but 85LTC is easy enough to find if you have enough experience, the numbers allow it, and a good proforma showing a solid DSCR at exit; even if you plan to sell. There are even a few 30yr Fixed Rate lenders starting to poke their heads out of the ground as of recent, so perm financing is getting easier to find as well. I've been running into a lot of deals lately where the borrower is wanting a certain LTV/LTC but their numbers simply don't support it. The reason they get 70-75LTV/LTC is because there's not enough value add bang for the buck. So the penalty is a lower LTV/LTC...

Happy to look at this one closer for you to see if anyone in my network can be a better fit.

Cheers!

[Alfath Ahmed]

Quote from @Steven Foster Wilson:

Quote from @David Wasiloski:

I found a 25 unit property in Louisiana that cash flows well but it needs some updating.  Asking 1.2mil.  I can cover 20% down but is anyone aware of a product/lender where I can put down 15% or 10%?  I would prefer to put less down and start cleaning up this property right away.   I don’t have all the answered but I’m here and open to ideas……

Owner financing is not an option.  I don’t own any like properties but have been a landlord for the last 10years. My credit hovers around 800

monthy income is 16k

P&I - TBD

Monthly expenses(taxes, trash, insurance ect.) estimated to be 1700.

 You could look for a hard money lender then when it is finished you can refinance out of it. Often hard money loans have a construction cost you can take out as well. 

 I agree with Steven. Hard-money loan is always an option. I have done this in the past and it has proved to be succesful.

[David Wasiloski]

So I think the fox and fill is really what I’m looking for.  I’ll have some money on hand to start the renovations right away If I can do 85% down. Great advice here on BP

[David Wasiloski]

So I think the fix and fill is really what I’m looking for.  I’ll have some money on hand to start the renovations right away If I can do 85% down. Great advice here on BP

[Mark Redmond]

Hey David, dm'd you

[Simmy Ahluwalia]

If you're still looking for a quote, 85% LTC on a bridge is the route to go, assuming both you and the asset qualify.  Once you take down the asset, make some improvements, evict any that need it, raise rents, etc....then refinance into Agency debt.