Financing a multi-family question

[Carlos Gamero]

I am considering buying a MF here in Tampa, about $120k. I have a few questions. What would be my best options for financing? 30-year Fixed Rate (conventional) an option at all or do I need to apply for a commercial loan? What about Amerisave.com or AimLoan.com? How much importance do lenders give to whether the building is 100% occupied with tenants under contract or 50%, or vacant? Thank you very much.

Pros:

- I have good credit and no debt.
- Able to put 25% or even 30% down.

Cons:

- Self-employed and income stream not steady.
- First-time landlord.

[Nathan Emmert]

Being self employed, you'll have challenges qualifying for lending but talk to a mortgage broker and see what they can do for you. You can qualify for up to 10 conventional mortgages (including your primary residence) so that is definitely the way to go. You'll be putting 25% down for the first 4, 30% after that.

Given you don't have a history as a LL, you'll likely need to qualify for the DTI without the help of the rent though some lenders may take it.

Another option is to look for a portfolio lender. Their requirements are often less stringent but you'll give up 30 years fixed. If you shop around at the small banks and credit unions you should be able to find someone that will do a 30 year amortization with a 5 to 10 year balloon at 1% or so over conventional rates.

Start there, and in a few years when the investments have seasoned and shown up on your tax returns the conventional market will show up... biggest issue with that plan is the rates can't stay where they are forever so you're best off going straight to conventional if you can...