Financing a Multi-Unit Deal

4 Replies

I'm looking for options for financing a multi-family deal.  Details about the property are as follows:

The property is an 8 Unit comprised of 2BR/1B apts.

It is located in Morganton, NC

The property of interest is full of renters. However rents are below average (according to rentometer). Property doesn’t need much TLC but with a little attention, rents could be raised closer to average.

The purchase price is $320,000. Current rents are $4500.

I have a salaried job plus commissions that I have been in for 5+ years.

My credit is between excellent and good. Biggest issue is length of my oldest account (I’m 29 and have only had my house for 5 years so not a “whole lot” of credit history)

Congratulations on locating your first multifamily property.  Assuming the property is in good condition and your expenses (repair,maint, cap ex, vacancies) remain low, your numbers would likely look favorable to a lender.  You mentioned  having near excellent credit and in a stable job, which also will be important in the lending/underwriting  process.

Is this your first rental or have you done others in the past? Is your career field related to real estate or finance.    If so, these may be a little helpful in increasing a bank’s comfort with you in lending.

I prefer, and generally recommend to others, working with local community/regional banks, given their flexibility and willingness in working with investors.  

As far as terms go, you will be under commercial/portfolio note based on the property - Expect your rate to be no better than 5 to 6%, most likely a down payment of 20 to 25% (though you can find those for 15% down if you shop around), and a balloon payment on a 5-7 year adjustable amortized over 20-25 years. 

Best of luck on the underwriting and purchase process.

I would be happy to meet up and discuss over coffee sometime, just let me know.

Skyler,We would be happy to work with you, be we need the answers to the following questions to see if we are a fit. Thanks again

-Your full name: First, Middle, Last
-Telephone: Office / Cell, email, fax, website if applicable
-Address: Street,city,state,zip
-Company name & legal form (Corp, LLC ,etc.)
-Down payment amount
-Monthly Bills(Including rent or house payment)
-Gross monthly income(before taxes)
-How many years do you need
-How soon do you need the money
-Executive summary, brief overview
( all other project documents will be requested after initial review and expressed interest ).

Reggie Truss

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