Single Family Rental

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Single Family Rental

Jordan GerkinPro Member
Investor · Midwest & Bay Area · Member since 2019 · 51 posts · 18 votes

Hi, looking to invest into a single family home to rent out. Is it common for a bank to say that they need 35% down and the longest loan length they have is 20 year variable interest rate? From what I understand, that seems to be more on the commercial side of things. They were telling me that since it’s going to be for a rental and used as a business, that’s the type of financing available. This happens to be the main bank I use and I do have a commercial loan through them, and they are local, so I was hoping they would be more easy to work with. Should I go and check other banks?

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Zach LemasterBusiness Member
Rental Property Investor · Denver, CO · Member since 2015 · 1k+ posts · 3k+ votes
5y

@David Robinson

Thank you for the mention!

@Jordan Gerkin

I received your message.  We look forward to connecting with you.

We've helped many investors just like yourself build a successful rental portfolio across numerous cash flow markets. It's all a numbers game, and the most successful investors invest in the markets where they get the best returns!

https://www.biggerpockets.com/users/ZacharyCole/references

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  • Forrest Faulconer
    Real Estate Agent · Oklahoma City, OK · Member since 2020 · 471 posts · 462 votes
    5y
    Originally posted by @Jordan Gerkin:

    Hi, looking to invest into a single family home to rent out. Is it common for a bank to say that they need 35% down and the longest loan length they have is 20 year variable interest rate? From what I understand, that seems to be more on the commercial side of things. They were telling me that since it’s going to be for a rental and used as a business, that’s the type of financing available. This happens to be the main bank I use and I do have a commercial loan through them, and they are local, so I was hoping they would be more easy to work with. Should I go and check other banks?

    Are they also asking for your first born son??? 

    In all serious, that is a hefty down payment for a single family, I don't know your credit history and all that but definitely call around!

    Forrest Faulconer

    6Reply
  • Kenneth GarrettPro Member
    Investor · Florida Panhandle/Illinois · Member since 2016 · 4k+ posts · 3k+ votes
    5y

    @Jordan Gerkin

    That's a very high dp. I have a number of commercial loans they are typically 25% down. I do a lot of BRRRR projects so when I refinance it's typically 25%. I'm currently working on a refinance and they will only do 70% LTV. Welcome to financing in the COVID era. I would look at other lenders.

    1Reply
  • Mike MoseePro Member
    Investor · Eagle Point, OR · Member since 2011 · 181 posts · 118 votes
    5y

    Definitely check other options, like a mortgage broker.   You should be able to get a mortgage for 20-25% down depending on credit history & number of outstanding mortgages.

    Good luck,

    Mike

    Good luck!

    1Reply
  • Jordan GerkinPro Member
    OP
    Investor · Midwest & Bay Area · Member since 2019 · 51 posts · 18 votes
    5y

    @Forrest Faulconer haha okay will do! I have pretty decent credit. In the 700s. Thanks for the input!

    1Reply
  • Jordan GerkinPro Member
    OP
    Investor · Midwest & Bay Area · Member since 2019 · 51 posts · 18 votes
    5y

    @Kenneth Garrett Wow okay thanks for the info, I’ll definitely shop around!

    0Reply
  • Jordan GerkinPro Member
    OP
    Investor · Midwest & Bay Area · Member since 2019 · 51 posts · 18 votes
    5y

    @Mike Mosee will do, thanks for the input!

    0Reply
  • Rico Nasol
    Investor · Henderson, NV · Member since 2018 · 102 posts · 38 votes
    5y

    @Jordan Gerkin you should definitely be able to find a commercial loan in the 80% LTV range.i just completed one last week. Let me know if you want to chat. I can help you find what you need.

    0Reply
  • Jason Leavitt
    Rental Property Investor · Portland, OR · Member since 2019 · 73 posts · 49 votes
    5y

    The lending requirements you described tell me the bank doesn’t want those loans in their portfolio. It’s sort of the equivalent of saying we don’t really want to be in that business but for the right price...  You should shop around. 

    0Reply
  • David Kelly
    Lender · Nationwide Lender · Member since 2019 · 391 posts · 140 votes
    5y

    @Jordan Gerkin

    That is your bank trying to keep the commercial loan vs them handing it to the residential department. My guess anyways. How far is the home from your primary?

    0Reply
  • Michael Noto
    Real Estate Agent · Southington, CT · Member since 2008 · 5k+ posts · 3k+ votes
    5y

    If you are looking to take title in a LLC then you can expect less favorable terms than a traditional fannie/freddie backed loan in your personal name. With that said, 35% is a little out of hand. See if other commercial lenders can do better.

    1Reply
  • Timothy Hero
    Lender · United States · Member since 2020 · 1k+ posts · 499 votes
    5y

    35% down is bazar. And on top of that, it's only 20 years? No thanks.

    0Reply
  • Salvatore Lentini
    Rental Property Investor · Doylestown, PA · Member since 2008 · 1k+ posts · 1k+ votes
    5y

    @Jordan Gerkin - I have all of my properties financed with commercial loans.  None have been 35% down.  25% is the norm.  Pre-covid 20% was not hard to find.  As far as term, some will do full 30, others may do 5, 7 or 10 but amortized over 20, 25 or 30 years.  I'm at 127 rentals and have worked with A LOT of investor friendly lenders.  Reach out if want some names.

    1Reply
  • Matthew McNeil
    Rental Property Investor · Boise/Portland · Member since 2017 · 709 posts · 742 votes
    5y
    Originally posted by @Jordan Gerkin:

    Hi, looking to invest into a single family home to rent out. Is it common for a bank to say that they need 35% down and the longest loan length they have is 20 year variable interest rate? From what I understand, that seems to be more on the commercial side of things. They were telling me that since it’s going to be for a rental and used as a business, that’s the type of financing available. This happens to be the main bank I use and I do have a commercial loan through them, and they are local, so I was hoping they would be more easy to work with. Should I go and check other banks?

    I guess that pretty much pokes holes in the "buy local" motto! Take your business elsewhere. Those are ridiculous terms for a SFH.

    1Reply
  • Jordan GerkinPro Member
    OP
    Investor · Midwest & Bay Area · Member since 2019 · 51 posts · 18 votes
    5y

    @Rico Nasol okay sounds great, I really appreciate that!

    0Reply
  • Jordan GerkinPro Member
    OP
    Investor · Midwest & Bay Area · Member since 2019 · 51 posts · 18 votes
    5y

    @Jason Leavitt okay that seems to make sense. They did seem to be a little hesitant. I will definitely look around, thanks!

    0Reply
  • Jordan GerkinPro Member
    OP
    Investor · Midwest & Bay Area · Member since 2019 · 51 posts · 18 votes
    5y

    @David Kelly okay and it’s about 3 hours away. The bank I was dealing with has a branch in the town where I’m looking

    0Reply
  • Jordan GerkinPro Member
    OP
    Investor · Midwest & Bay Area · Member since 2019 · 51 posts · 18 votes
    5y

    @Michael Noto okay will do, thanks!

    0Reply
  • Jordan GerkinPro Member
    OP
    Investor · Midwest & Bay Area · Member since 2019 · 51 posts · 18 votes
    5y

    @Timothy Hero okay glad I’m not the only one thinking this was a bit crazy

    0Reply
  • Jordan GerkinPro Member
    OP
    Investor · Midwest & Bay Area · Member since 2019 · 51 posts · 18 votes
    5y

    @Salvatore Lentini okay I might do that, thank you!

    0Reply
  • Jordan GerkinPro Member
    OP
    Investor · Midwest & Bay Area · Member since 2019 · 51 posts · 18 votes
    5y

    @Matthew McNeil haha yeah I guess so, I’m definitely going to shop around, thanks!

    0Reply
  • Account Closed
    Rental Property Investor · Glens Falls, NY · Member since 2016 · 176 posts · 169 votes
    5y

    Fannie/Freddie matrix's state 15% down payment on a conventional non owner occupied single family investment.. Not sure why your bank is telling you it's a commercial deal.. Find a new lender. 2-4 unit fannie/freddie matrix's state 25% down on conventional non owner occupied properties 2-4 units. 

    0Reply
  • Klint Ruud
    Investor · Nashville, TN · Member since 2019 · 92 posts · 96 votes
    5y

    Jordan, 

    You should absolutely check with someone else. I've seen hard money lenders provide better deals than this. Feel free to reach out if you have any other questions or would like recommendations! 

    0Reply
  • April Munoz
    Real Estate Agent · 78254 · Member since 2019 · 24 posts · 12 votes
    5y

    100% call around

    1Reply
  • Gail W.
    Investor · IL · Member since 2019 · 151 posts · 135 votes
    5y

    One of the banks I deal with is in Shelbyville, It is a branch of a bank from Charleston, They offered me a commercial mortgage for 20% down and 6.25%. 

    0Reply
  • Kimberly Carver
    Member since 2020 · 119 posts · 56 votes
    5y

    @Jordan Gerkin we got a private loan 25% down, 30 years. I think you should shop around!

    0Reply
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