Posted by Doug Rush on April 02, 2010 at 06:59:21:
If they use seller financing, I can buy the mortgage note and get them their cash, assuming it’s a good note.
Commercial Multi Family Financing - Posted by Deb Stephenson
Posted by Deb Stephenson on March 27, 2010 at 07:00:37:
Hi all. I’m located in RI and want to buy a REO 6 unit multi-family property. Each unit has 2 beds. 4 units are occupied but the bank isn’t charging rent (keeps tenants so no vandalism occurs). Before foreclosure, building was pulling in $3000/mo. The price has been reduced to $120K. Property needs some cosmetics but nothing major. I have 25% down but can’t seem to find anyone who will do a commercial loan< $100K. Anyone know of a lender that will do this loan? My partner and I have credit scores of 740+ and combined incomes of $150K+. Any help is appreciated. Thanks in advance!
Re: Commercial Multi Family Financing - Posted by Judah Hardmoney Hoover
Posted by Judah Hardmoney Hoover on April 01, 2010 at 15:55:45:
The first thing you need to do I find a good mortgage broker. A good mortgage broker will be
- someone that is an investor themselves
- conventional, and FHA loans
- have access to hardmoney
- have relationships with small and med sized local banks in your area (that?s how you get commercial loans done)
Banks lend on Credit, Collateral, and Income. (you have 2 out of 3) You have good credit (700 scores) good collateral (25% down), but you have not told us enough about your income… personally AND that of the property. Do you and your husband show a positive number on your adjusted gross income every year? If not that could be the problem. 2ndly does the property have a 1.25 DCR(debt coverage ratio) or higher? You need to know the DCR of every loan before you apply at the bank. If you know your DCR you position yourself in the banks eyes as someone that knows what they are doing… if you don?t, you are just like everyone else. (Hint: banks look for reasons to turn down ?everyone else? but try to approve investors that know what they are doing) Let me know if you need to know how banks figure out DCR.
IF you are putting money down, and you have good credit, and the property has a good DCR and you show positive income on your tax returns and you still can?t get money you are NOT working with a good mortgage broker, see definition above.
Judah Hardmoeny Hoover
Re: Commercial Multi Family Financing - Posted by Doug Rush
Posted by Doug Rush on March 29, 2010 at 16:28:38:
Deb,
You might want to see if the seller will carry back the financing.
Re: Commercial Multi Family Financing - Posted by Deb Stephenson
Posted by Deb Stephenson on April 01, 2010 at 20:35:23:
Judah, I can’t even find a bank that is interested enough to ask about my income! One bank said they would do a ‘drive by’ and get back to me by the end of this week. They also wanted me to have a property mgr and put 30% down - all this in a conversation on the phone! No meeting, no credit check, income verification - nothing! I think I’d have better luck if I needed a $500,000 loan - at least someone would be interested!
No bank has asked about DCR which is way over 1.25 (if the tenants are paying which right now they aren’t). I need a loan of< 90K and I can pull in 3K/mo with all units rented, hello?? Plenty of cash flow. No one is interested in small loans…discouraging.
I did talk to a private financing guy who wanted 14 - 15% for a short term loan. No thanks, I’m not desperate I just want to make an investment for God sake! Guess I’ll stick to 4 units and under. Thanks for replying.
Re: Commercial Multi Family Financing - Posted by Deb Stephenson
Posted by Deb Stephenson on April 01, 2010 at 20:26:33:
I tried. Their reply: ‘not a chance’. I think they’re already taking a beating on this one.