Multi-Family Properties advice and Need financing

[Sonia Jones]

Hello, 

I am a newbie here, and I would love to get some feedback and advice from those with experience. I need to find a lender with a 20% down payment on a multi-family 12 unit property. I only find lenders who can do 70-75% Loan to Value. My credit is in the 700s, and the property is producing positive cash flow. 

[Logan Singleton]

Hi Sonia, 

Multifamily with 5+ units is considered commercial and almost always requires a larger downpayment, a higher debt service requirement, and a higher interest rate than residential properties.

[Gary Nelson]

Hi @Sonia Jones! You can explore options with local Branson portfolio lenders, who handle their own loans but typically offer higher interest rates compared to residential mortgages. If the property generates positive cash flow, consider applying for what is called a Debt-Service-Coverage-Ratio (DSCR) loan. This type of loan uses the property's rental income and projected expenses to determine eligibility. With a 20% down payment, you should have several options to be choosing from! Feel free to PM me for more details!

[Brandi K.]

Your best bet would probably be finding a local small bank or possibly credit union or find a way to come up with the other 5%.  There are a lot of small banks that are no longer looking to do commercial RE loans anymore.

[Lucia Rushton]

@Sonia Jones you're lucky it's back in the 70 - 75% LTV, it's been down in the 55 - 65% LTV for the last year

[Owen Dashner]

You need to contact more lenders. There are absolutely lenders out there who do 80% LTV if the deal makes sense - you just haven't contacted enough. Mix in some brokers as well to widen your net. Small town banks are usually great to work with. Try Arvest or Midwest Regional Bank out of St. Louis as well. Not sure what their current LTV's are, but worth a shot. MRB is funding a hotel conversion project in Branson for me next week (not at 80% LTV, but mine is a change of use/redevelopment). Good luck!

[Givo Aghasi]

Hi Sonia, I can help you go over the deal and review some loan options. Yes, most lenders will go up to 70%-75% LTV because of the property type and your experience but we have one option that does allow for 90% CLTV. Feel free to PM me for more details!

[Donna Rundo]

Hey Sonia! 

Congrats on finding a cash-flowing property, that’s a big win!
I know it can be tough finding the right lender, especially when you're dealing with down payment requirements. I work with a few lenders who specialize in multi-family deals and might be able to help you out. 

Let’s connect and see what options are out there for you. Feel free to DM me if you want to dive into it!

[Max Fisch]

If you have the ability to service the debt, meet liquidity and net worth requirements, and the loan amount is $1M or more you should look to an agency product.  Non recourse too.

I agree with others, you can absolutely get the leverage if the property can support it and you are a strong experienced sponsor which it seems you are.

Best of luck!

[Drago Stanimirovic]

Hi Sonia,

It sounds like you're off to a solid start with good credit and a cash-flowing property in mind. Securing financing for a multi-family 12-unit property can be a bit different from single-family deals I think i can help you fund your 12-unit property with better terms. With your solid credit and the property’s positive cash flow, we can explore options like commercial lenders, portfolio loans, or even creative financing like seller financing or partnerships.

Let me know if you'd like assistance! Feel free to reach out.

Best, 

Drago

[Craig Warner]

Quote from @Sonia Jones:

Hello, 

I am a newbie here, and I would love to get some feedback and advice from those with experience. I need to find a lender with a 20% down payment on a multi-family 12 unit property. I only find lenders who can do 70-75% Loan to Value. My credit is in the 700s, and the property is producing positive cash flow. 

 Hi Sonia,

Unfortunately on 5+ Units we are maxed at 75%, where as 1-4, up to 80% DSCR. Even our other small balance commercial investors are also capped at 70-75%.

Thanks

Craig

[Carrie Matuga]

@Sonia Jones is the pricepoint of the loan above a 1.1M loan and is the building fully occupied or at least 80%? If so there are a few options for 80% financing you can use, if not, then 75% would be the cap. There's a weird window in financing above 4 units and below a 1M loan where rates are higher and leverage is lower than if you are at 1-4 units OR 5+ AND above 1M loan value. I'd love to connect and talk more. Send me a DM.

[Craig Warner]

Update:

We can go to 80% LTV as long as you have a 725 score and property cash flows and is not considered Rural.

Be happy to discuss..

Thank You

Craig