Co Share Friendly Lenders?

Question

Hi All,

I am looking at finaincing and rehabbing a current 10unit 5bdrm per unit building into a ch-share/pad split style property. I am wondering if anyone has used a lender who has experience with finaincing on these types of properties?

Thanks for the help!

Buck Sugden · Answer

Great info, thanks for the help Brenden!

Brenden Mitchum · Answer

Hey @Buck Sugden, welcome to the BP community!

Wow, sounds like a cash cow you got there!

First step is to make sure you sound legit and understand what the lender is looking for. Co-living and padsplit is not something most lenders are looking for. However, they're typically happy to finance the purchase and renovation on a solid commercial deal. As long as that's what you have, you're good for the purchase side. All you need is some kind of rehab or bridge loan, which is not hard to come by these days. They'll be mostly concerned with ARV which will center around market rents. As long as they see high likelihood be paid off, you're good. If you're buying at such high a price that the deal doesn't make sense at market rent, you may have a problem. I don't have the solution for that, unfortunately.

The refi is a different story since that lender will want to see leases and/or verifiable rent before providing long-term debt. Padsplit at the moment refuses to put a dollar amount on their leases so obviously that is a big obstacle. However, there are lenders out there that will refi these types of properties as long as they can verify rent at or over market. Best bet would be to connect with a loan broker in your area who is familiar with co-living and well connected. That's what we're doing here in Atlanta and it's been working out great so far!

Hope this helps a bit. Please, feel free to reach out anytime if you have other questions or just want to chat!