All Forum Posts by: CJ M.

These are best execution: Great credit, DSCR>1.25, not a first time landlord, some will include a requirement that you establish a banking relationship with the lender. Ballpark 1-2 pts in most cases. Lots of 25 year amortization options, but 30 is often doable in our network.

Rates are typically always higher for 5+ units and commercial properties. Most of the multi-family properties that my clients have asked about do not have a good cash flow right now from what I've been seeing. To be honest, I would stick with 1-4 units until rates go down more. 

you can get all kind of answers here but for starters:

most commercial loans at least 25% down

expect amortizations over 20 or 25 years

most commercial loans are tied to an index + spread and have a reset after or balloon (all paid) a set period of time, your rate will depend on the period 5, 7, 10 year. Take a look at the federal home loan bank rate table. Banks will put a "spread" on top of that to get their rate. 

A 4.67 5 year rate (loan either resets or balloons in 5 years) with a 2.50 spread will give you a rate of 7.17%

Most banks will want a debt coverage ratio of 1.2 or above

Debt strategy and refi issues, along with large cash positions and exchanges are common. At $750K, you are in a lower number commercial property, so expect a little more residential flavor but the above should give you a general idea.

Also: You will NEVER read a seller provided pro-forma that is accurate. Do they inclued capex reserve in the CAP rate/NOI? Property managment? Whats the vacancy rate they are using? Current or projected rents? Etc.

Hope this helps.

Hi CJ, I quoted some 5+ unit multifamily this week between 8.50-9.25% (depending on prepayment penalty). That was at 75% LTV.

80% LTV = 9.50%
75% LTV = 8.75%
70% LTV = 8.50%

Those are 30-year fixed rates. The 5/1 ARM program will be -0.25% on rate. DSCR requirement is 1.15 minimum, or 1.00 for a higher rate.

Any decent General Contr will have a few jobs going at once. They need to keep their crews and their subs busy and there are always delays on jobs where you need to take your guys over to another jobsite to work.

Examples - The lumber does not arrive when it was supposed to. Or the customer does not pay when they're supposed to.....You can't have your guys standing around all day, so you get them over to other jobs.

@CJ M. Hi CJ. I just quit my W-2 and got my own health insurance policy.

I use an individual insurance broker for my property insurance. Their brokerage does not sell health insurance but she hooked me up with a different insurance company that does sell health insurance and that broker walked me through all of my options on the Exchange. He discussed my individual needs and in the end recommended a Silver policy based on what we had discussed and much like you my policy was to be around $450/month. However, based on my projected income for 2024 he was able to get me a $350/month rebate or discount, not sure which off of the original cost bringing down my total cost to $99.20/month.

While I have no idea of your situation and specifics and I truly hope you are making hundreds of thousands of dollars more than I will be this coming year, if you are not going to be making a bazillion dollars it might pay off to contact an independent insurance broker to see if you qualify for a discount on that policy because before this gentleman told me about it I had no idea there were these types of discounts.