What are my options?

Question

For the past few months, I have been learning about Multifamily CRE and am interested in entering the space in the next year or so.

There are a few hurdles that seem difficult for me to clear, they are as follows:

A) The NW Requirement - lenders are looking for a NW greater than or equal to the loan amount. From what I've read, it seems larger, national institutions are more likely to uphold this guideline more rigidly while local credit unions would be more flexible. Could ya'll share your experience with credit union's level of flexibility with this requirement?

B) Experience - For the last three years, I have owned and managed a triplex in Cleveland's westside. During that time, I have completely renovated the property and have added ~$100,000 in forced appreciation, while the property has naturally appreciated ~$75,000 (based on recent, nearby sales). Is this enough experience for the average Multifamily CRE lender? Looking to do a loan size of $300,000-$600,000

C) I am interested in purchasing a 5-15 unit building. What kind of lending entity & and lending packages would ya'll recommend based on my finances below?

Assets:

Cash: $6,000

401k: $30,000

Stock: $50,000

Car: $32,000 (2024 purchase w/ 6k miles total)

Home Value: ~$425,000

LiabilitiesLoan Amount: $250,000

I appreciate any and all input, thank you!

Mike Grudzien · Answer

Save your money.

Jason Taken · Answer

I think your liquidity is a little low for the loan amount - your experience is fine on SMALLER projects.

Joseph Tadres · Answer

Hey Andrew! Congrats on the work you’ve done with the triplex. I really like your goal of moving into 5 to 15 units. One option you might consider is seller financing. I haven’t done one myself, but I know it can get risky if payments become an issue or if an attorney hasn’t reviewed the agreement. Another approach I’d recommend is pulling a HELOC on the triplex and using that capital to purchase your next property.

Greg Scott · Answer

It looks like you have a Net Worth sufficient to do a $300K loan, although the lender may also want to see some more liquidity too.

To go bigger, you may need to get a partner that can be a guarantor on the note.

The size loans you are looking at are likely too small for agency debt so you would be looking to banks and credit unions anyway.  Do some networking in your area and find out what lenders like that sort of product.  Then ask them.

James Wise · Answer

You need to get some more cash bro.

Frankie Vozzi · Answer

Andrew, sounds like you’ve built some solid experience with your triplex  that definitely helps when moving into multifamily.

There are programs out there that may fit your profile without being as rigid as the big institutions.

I sent you a DM, happy to help!

Corby Goade · Answer

Congrats on your triplex and making some moves, love the ambition!

My honest two cents; it's easy to get wrapped up in the Grant Cardone 10x your life nonsense. I think most people who go down that path get discouraged and end up not doing anything.

What's wrong with trying to 2x your life? You don't really have the resources (yet) to do a deal like this, so do another deal just like the one you already have- another triplex in an afforable area. Build up some equity and cash flow on residential properties and scale that- anyone can do that with limited resources. A few deals like that and some time and then you can start looking at 1031 exchanges in to larger properties and repeat that same process at scale.

It's okay to grow slowly and responsibly, it's not as exciting of a topic at dinner parties, but it works and it's very low risk. You're doing great, keep doing what you're already doing.

Arman Ahmed · Answer

@Andrew Nguyen

Andrew, congrats on the progress so far — adding that much value on your triplex is no small feat and definitely shows you’ve got the right experience under your belt. Local credit unions and community banks in Cleveland will usually be more flexible than big national lenders, especially if you can show the deal cash flows well and that you’ve successfully managed property before. For a 5–15 unit in your price range, I’d start there and have a conversation with a few lenders to see who’s willing to work with you. Don’t be discouraged by the net worth requirement — you’ve already got a strong story to tell, and many lenders care more about the property performance and your track record.

Jake Yuskaitis · Answer

if you managed the property it doesn't count. you need to be on the HUD for it to count as experience. lenders are going to want to see some experience before you dive into a commercial property like that.$6k is nothing and wouldn't even cover the closing costs. your 401k and stocks aren't usable unless you cash them out.

I recommend getting more cash and getting a few 1-4 families under your belt first.

What are my options?

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