Multiuse Property Financing - How?
I'm looking at a multi-use building, 4 apts, three storefronts. Two of the storefronts are occupied. One of the two storefronts includes a laundrymat business. Any ideas on how to finance this? Sales price probably will be around 160k, like to put down 10%. Cash flow is great. Any ideas?
I was just talking to my commercial loan broker today, who was saying that for mixed use the debt service coverage ratio most banks require is 1.6 for mixed use, 1.2 for apartments. So your ratio of net monthly income to the monthly payments (PI) should be 1.6.
Ask other people who are more experienced. I was looking to do my first commercial deal on a 7 plex apartment and the rents were low. Of course, you might find a private lender who will do almost anything.
I would suffest trying a LOCAL bank. I looked for a long time for the right commercial loan and I think I finally found it through a local bank. they are loaning me the money based mostly on the property and not me. the only drawback is the amatorize over 20 years over 30 but the property still will cash flow. the interest rate is not bad at 6.5. its worth asking a bank in your town.
I agree with dlitedan go to the local lending sources first they have first hand knowledge of the area and the potential of the property. I have found they are more willing to lend money at a lower interest rate than the national lenders, at least in my area and 6.4% is what I recently got on my multi use 7 unit property.
Any clever ideas on getting funding for the 20% down most commercial loans require?
I am wanting to do some BIG projects, but the down is a killer.