Best loan for Financing a Buy and Hold property 5 units plus

Tampa, Florida
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Best loan for Financing a Buy and Hold property 5 units plus

Jonathan M.
Professional · Bradenton, FL · Member since 2017 · 37 posts · 6 votes

Hello all,

Looking at buying a mixed use property multifamily/office with 4 occupied apartments and 2 offices. It will be owner occupied, I would like to finance the property with the lowest down payment possible and a decent interest rate with long payment term. Does anyone have any recommendations?

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Caroline Gerardo
Lender · Washington DC · Member since 2015 · 2k+ posts · 2k+ votes
3y

I would call that mixed use. What percent of the whole is residential? Location, sales price, market rents of residential, what % of the residential are you going to reside in and what rental income remains, is the office currently rented, condition, your FICO, your income  then I can tell you what is available.

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  • Caroline Gerardo
    Lender · Washington DC · Member since 2015 · 2k+ posts · 2k+ votes
    3y

    I would call that mixed use. What percent of the whole is residential? Location, sales price, market rents of residential, what % of the residential are you going to reside in and what rental income remains, is the office currently rented, condition, your FICO, your income  then I can tell you what is available.

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  • Jack Mawer
    Lender · Member since 2022 · 338 posts · 374 votes
    3y

    Have you looked into DSCR loans?

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  • Devin PetersonBusiness Member
    Lender · Sarasota, FL · Member since 2022 · 2k+ posts · 678 votes
    3y

    Your best bet is a DSCR Mixed use loan. Or, full commercial there are a lot of ways you can get savvy with creative financing as well depending on the sellers situation.

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  • Steve Vaughan
    Rental Property Investor · East Wenatchee, WA · Member since 2014 · 10k+ posts · 16k+ votes
    3y
    Quote from @Jonathan M.:

    Hello all,

    Looking at buying a mixed use property multifamily/office with 4 occupied apartments and 2 offices. It will be owner occupied, I would like to finance the property with the lowest down payment possible and a decent interest rate with long payment term. Does anyone have any recommendations?


    GSE low DP OO loans won't apply here I doubt.

    All of my commercial places, including mixed-use, had 5/5/20 commercial loans.

    The seller may be allowed to carry a 2nd for 20% or whatever you guys agree to.  That's the way to a low out of pocket DP with these. 

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  • Matthew Wolk
    Lender · Tampa, FL · Member since 2022 · 79 posts · 28 votes
    3y

    You should definitely be looking into a DSCR loan. I specialize in these and am a local Tampa lender. BlueGrey Mortgage. Let me know if you want to chat!!

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  • Erik EstradaBusiness Member
    Lender · Member since 2022 · 6k+ posts · 1k+ votes
    3y
    Quote from @Jonathan M.:

    Hello all,

    Looking at buying a mixed use property multifamily/office with 4 occupied apartments and 2 offices. It will be owner occupied, I would like to finance the property with the lowest down payment possible and a decent interest rate with long payment term. Does anyone have any recommendations?


    DSCR loans cover 1-4 units, residential properties, non-owner occupied. It'll be tough to find a commercial lender that will let you owner occupy a mixed use property, and do a low down payment.

    You can get away with combining a second lien with the 1st on a commercial loan, but you are putting yourself at risk being over leveraged in a market that is tight. Also many of these full doc loans require commercial real estate investing experience. 

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  • Albert Bui
    Lender · Bellevue WA & Orange County, CA · Member since 2013 · 2k+ posts · 1k+ votes
    3y
    Quote from @Jonathan M.:

    Hello all,

    Looking at buying a mixed use property multifamily/office with 4 occupied apartments and 2 offices. It will be owner occupied, I would like to finance the property with the lowest down payment possible and a decent interest rate with long payment term. Does anyone have any recommendations?

    When people mean DSCR loans sometimes its confused with Gross DSCR 8-9% commercial use/business use rental product then theres local bank that uses REAL DSCR (NOI/debtservice) and yes that is what you what to use to hold your property ultimately.

    I do the rental grade DSCR based on gross income too and it has its use of course but if I was the RE investor id rather have the local commercial notes as you'll be 150-200 bps (1.5-2.00% rate) less than DSCR rental products (gross income / PITIA or principal/interest/taxes/insurance/assessments type stuff).

    The ratio of residential use versus your offices will affect the appetite of which local lender/community banks will take this on as well because apartments are seen as traditionally more stable income flows so they'll want a predominant portion of the income to be come stable residential sources with the remaining proportion to be from office/retail.

    @Matthew Kwan@Carlos Valencia


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