All Forum Posts by: Tyler Blackwell

@Account Closed that's great to know! So, they required your DSCR to be higher on the higher LTV loans? I'll look into Lima One...

@Sami Gren I'm in the process right now of contacting my local banks and credit unions, though I'm finding they're a little slower than residential lenders on the response time. Figured in the mean time I could tap into the BP mindmeld. The quality of the feedback just on this thread is incredible. Thanks to everyone for the comments and perspectives. I have investing experience but all in the 1-4 unit space. Looking to make the jump to commercial soon and it's nice to leverage all the experience here!

Hey @David Acosta, I made the comment about it possibly not passing the DSCR criteria if the loan were to 85% (which I didn't even know existed for commercial MF), but it definitely will work out at 70-80%. Didn't know about bridge debt, thanks for letting me know!

Yeah @Todd Dexheimer, it's amazing how much the DSCR changes when you just toggle 5% LTV from 75 to 80. Makes a big difference! My understanding is most banks are looking for 1.25, but I suppose that depends on the lender.

OK, so it sounds like though it isn't standard, it is possible! 85% would be great as well, but for this particular property the DSCR might not pencil until it is stabilized. And @Andrew Beauchemin, your advice to build in some conservative numbers for volatility is sound. Now, you say that the 80% for agency loans only applies to primary markets? This is definitely a tertiary market property...

Is 80% LTV a possibility for commercial multifamily? I have an opportunity that would work with that kind of leverage and still make DSCR requirements. The note would be above $1M. Credit is excellent and net worth is enough to support the loan. Plenty of RE experience in multifamily, just don't know much about commercial MF financing. Thoughts?

@Hugh Harps I have to agree with @Ned Carey, the structure and repayment options are pretty unlimited and depend on what you and the seller agree to. I've seen some sellers that will carry for a short time, 1-5 years, while the property is seasoned for refinance. I did a deal last year where the seller wanted steady retirement income, so we drafted a 25-year note, no balloon, no nonsense. Find out what the seller wants and see if it fits your business model.

@Dominick Marschall another option would be to do a cash-out refinance of the property and pull out some cash. You'd probably get in the neighborhood of $50-60k, so you might be tight if you try to buy TWO duplexes (even with 3.5% FHA), but possible depending on what you buy. Lenders are going to want you to have some reserves as well, so keep that in mind.

We've used ours to "purchase" hard money to buy properties in need of rehab. Once we're done rehabbing, we refinance and pay that LOC back. Most banks will offer a personal line of credit in an amount determined by your income. Also you could get a home equity line of credit (HELOC) if you've got some equity there. Some banks will lend up to 90% LTV for HELOCs.

Sounds like a win to me!