Posted by brandoncbsre on May 07, 2008 at 17:11:13:
It depends. If they are all equal in terms of price per door…I’ll take the 8 unit. It should be cheaper to maintain over the years and more convenient to manage etc.
As far as financing goes anything 5 units or more is considered commercial. I buy everything with 15 and 20 year commercial loans though. They are typically 75%LTV but a good local bank will allow cross-collateralization of properties you own and seller seconds. See my post in the Financing forum posted yesterday title “Why Small Banks Rock” for more on working with small banks.
I’m all for cashflow…but if it wont flow on a 20 year I’m not interested.
Good Luck in Your Investing
Is a Quad Plex Commercial or Residential? - Posted by Steve B
Posted by Steve B on May 07, 2008 at 10:23:00:
With regard to financing, is a Quad Plex typically considered Commercial or Residential property? Commercial lenders usually fund only 75% of a project in my experience, while I understand that residential lenders may provide better terms.
Another way to ask this question might be: Would you rather buy four Duplexes, two Quads, or one 8-unit apartment building? Why?
Thanks for any insight on this.
Steve B
the quick answer - Posted by carolfl
Posted by carolfl on May 16, 2008 at 17:02:48:
is that one to four units is generally considered residential. What we are finding with refi-ing an entire neighborhood of duplexes, triplexes, etc (75 doors total) is that the investors are hesitant these days to do blanket loans… let’s say, there are fewer lenders whose programs include those parameters than previously.
There are a whole lot more aspects to the choice of property, and if you want some really good material to help you sort it through, Ray’s Guide to Commercial RE is great.
Have fun!
Carolfl
Re: Is a Quad Plex Commercial or Residential? - Posted by Lux Lending Group
Posted by Lux Lending Group on May 08, 2008 at 18:59:10:
Steve that Quad is probably going to be considered commercial. You cound probably get a loan up to 80% depending on your circumstances as a commercial applicant. Residential underwriting standards are super tough righ now, money seems to be flowing to business and commercial lending and fleeing residential. Choose commercial, looks good now will have enduring value through the rest of this downturn.
Ferris Anderson