All Forum Posts by: Ryan Bakerian

Quote from @Scott E.:

Quote from @Ryan Bakerian:

Quote from @Scott E.:

His experience with commercial lending vs residential lending is the same as I've had.

Of course it makes sense to shop around, but the commercial terms that you outlined are very normal and reasonable.

On the surface, the numbers on the 4-unit sound very strong. Out here in Scottsdale a 4-unit is going to cost you about $1,000,000 and cash flow will be almost exactly the same (~$4,800)

4 Unit only makes like $1200 a month fully rented and is likely at top of value range.

Why on earth would anyone spend 1M to make similar numbers?

Great question. The people spending $1M to make similar numbers are banking on appreciation. It's not uncommon the past few years to see A++ location deals trade in the 2-4% cap range.

 Understood… wild stuff.

Quote from @Scott E.:

His experience with commercial lending vs residential lending is the same as I've had.

Of course it makes sense to shop around, but the commercial terms that you outlined are very normal and reasonable.

On the surface, the numbers on the 4-unit sound very strong. Out here in Scottsdale a 4-unit is going to cost you about $1,000,000 and cash flow will be almost exactly the same (~$4,800)

4 Unit only makes like $1200 a month fully rented and is likely at top of value range.

Why on earth would anyone spend 1M to make similar numbers?

Quote from @Robin Simon:

Quote from @Ryan Bakerian:

Hi everyone. I have a client currently looking at starting his investment portfolio and he ran into a couple off market deals. 

He is looking at a 4 Unit for $360K that takes in roughly $4400 a month with taxes around $7K a year. Good building, in a bit of a rural area however. Rents need increasing and are roughly 15% below average. 

The other is a nice low maintenance brick 6 unit that takes in $5800 (all 1 bedrooms) in a upcoming area with good employment. Rents also roughly 15% below current rates. Rare property in this area. Large lot, lots of parking. Detached garage. Near new pharma company. 

Both units are able to be purchased under value by 50-75K off market. 

He is noticing even on smaller deal lending the commercial rate is significantly higher and more red tape vs. the four unit property. (Commercial rate being a 20% down 10 year term, 25 year amort. with a 5 year reset). The four unit is more fundable obviously. He is debating using HELOC to buy the 4 unit (25% down) and cash funds of 20% down to buy the 6 unit.

Are there any better lenders that can offer better than the above? The above is a local bank and he is an instate buyer but may only go after one property. I'm thinking the 6 unit is a better long term buy and hold as its a rare apartment zoned property in a hot area however there is a lot more initial red tape and closing costs. 

Thank you in advance for the assistance. 

Check out this BP Article on Multifamily DSCR Loans for 5-10 Unit properties

https://www.biggerpockets.com/blog/multifamily-dscr-loans

Rates are a bit high BUT - are typically 30-year fixed fully amortizing (30-yr schedule) or even Interest-Only for the first 10 years, so even a higher rate might mean an equivalent or lower monthly payment with those terms

Example from the article:

Appreciate the lengthy response Robin,

Only issue with DSCR is rate is higher AND my buyer will need another $19,000 down 25% vs 20%. That 19k could go toward another property.

Interest only seems risky no?

Hi everyone. I have a client currently looking at starting his investment portfolio and he ran into a couple off market deals. 

He is looking at a 4 Unit for $360K that takes in roughly $4400 a month with taxes around $7K a year. Good building, in a bit of a rural area however. Rents need increasing and are roughly 15% below average. 

The other is a nice low maintenance brick 6 unit that takes in $5800 (all 1 bedrooms) in a upcoming area with good employment. Rents also roughly 15% below current rates. Rare property in this area. Large lot, lots of parking. Detached garage. Near new pharma company. 

Both units are able to be purchased under value by 50-75K off market. 

He is noticing even on smaller deal lending the commercial rate is significantly higher and more red tape vs. the four unit property. (Commercial rate being a 20% down 10 year term, 25 year amort. with a 5 year reset). The four unit is more fundable obviously. He is debating using HELOC to buy the 4 unit (25% down) and cash funds of 20% down to buy the 6 unit.

Are there any better lenders that can offer better than the above? The above is a local bank and he is an instate buyer but may only go after one property. I'm thinking the 6 unit is a better long term buy and hold as its a rare apartment zoned property in a hot area however there is a lot more initial red tape and closing costs. 

Thank you in advance for the assistance. 

Thanks everyone for the info, I've tracked down what I need. Much appreciated. 

Hey Nick, Im in the Albany area if you choose to bounce over this way. 

Good Morning. I have a client that is looking for a commercial lender for a $400,000 apartment building (6 unit). We are looking at options for them for financing. It appears most of the traditional local banks here have $1M minimum requirements for borrowing. 

Has anyone used a rockstar lender lately they would like to suggest? Would a DSCR loan here make sense? Borrower has 15-25% down and 800 credit score. Maybe an SBA504 but I don't think they can be used for rental properties?

It's a great market to invest In. I have a ton of clients here with multi unit properties. 

Originally posted by @Steve Jellen:

@Jim S. Contact Ryan Bakerian, he's a real estate agent in Albany and a member of Bigger Pockets.

 Thank you Steve for the referral! Happy to help anyone as I know the market well here. 

Fantastic info in here from everyone, thank you for taking the time to reply. I will reply more later.