Financing Options for 16 Unit for 1 million dollars?

4 Replies

Hello All, 

So far my partners and I have SFHs and 4 Unit or multifamily units. A nice 16 Unit (there are not many in my area) just came on the market at what seems to be a good price. So far we have used a Commercial Portfolio Lender of those, but the longest they want to amortize is 25 years with a 10 year fix. 

What I am wondering is if there are 30 year or longer loans that are income based when you get to this size and price of unit? If I was reading the HUD site right it sounds like they are only for loans of 1M or more?

Any advice would be appreciated. I am in Wisconsin, and the property is less than 15 years old. 

Thanks Dan Dietz

Originally posted by @Daniel Dietz :

Hello All, 

So far my partners and I have SFHs and 4 Unit or multifamily units. A nice 16 Unit (there are not many in my area) just came on the market at what seems to be a good price. So far we have used a Commercial Portfolio Lender of those, but the longest they want to amortize is 25 years with a 10 year fix. 

What I am wondering is if there are 30 year or longer loans that are income based when you get to this size and price of unit? If I was reading the HUD site right it sounds like they are only for loans of 1M or more?

Any advice would be appreciated. I am in Wisconsin, and the property is less than 15 years old. 

Thanks Dan Dietz

Hi Dan. For commercial properties (anything 5 units or more), the longest term you will get is 10 years, except for some special programs like HUD. You should, however, be able to get a 30 year amortization schedule with a 10 year balloon payment when the term expires. I have some mortgage broker contacts who might be able to help with a property like yours. If you PM me with your email address, I will make an intro.

Dan,

It’s not common to have a 30 yr amortization on a multifamily property, but it does exist.  I have two lenders that offer it for loans ranging from $750k - $5MM.  Please PM me if you’d like additional information.

Thanks!

@Daniel Dietz In my shoes, I’d be happy with a 10 year fixed and 25 year amortization schedule 🤷🏻‍♂️. Well, okay, depending on the interest rate I’d be happy. And then there are those pesky origination costs. So if you do find a 30 year amortization you might find that “benefit” offset with a higher origination fee, higher interest rate, higher down payment required, etc. My (very limited) experience is that it’s all a balancing act. Heck, you have enough equity and enough net worth you can negotiate an interest only loan. That doesn’t mean those terms are easy to get and broadly available 🤷🏻‍♂️

I’m doing a lot of weird shrugging this morning...

@Daniel Dietz

25 year fixed and a 30 year amortization with a 3 year fixed period, no income verification are normal, but they aren't bank products, they are for borrowers that can't qualify for bank financing and don't want to go for a hard money route.

Stephanie

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