Bank loan, the longer, the better ?

Question

Hello !
	
	So i'm just playing with the though:
	
	If I'm going to focus on multifamily-apartments, MANY, so i will not just buy one, I want to maximum the cashflow and buy more properties so I get more money, so for example, If I COULD get a 50 or 60 year loan instead of 15/30, would it be better with the 60 year loan ? we all know that the total I will pay in intrests will increase but so will the total income I get from cashflow, right ? So for this tactic: Buy and hold ( not selling anyone ) gonna buy 100+ properties, would the longer loan help me or is there a "breaking point" where u stop earning money and instead loose money ? I woulden't say so becouse, the less I pay, the more money I can save and invest, Right ? 
	
	Would be gr8 if someone could tell me their though about it all, thank you very much!

Chris Winterhalter · Answer

Account Closed

HUD does offer a 40 year term with higher LTV's for larger multi-families however I think the program is very strict.  It's mainly for affordable or senior housing from what I remember.

Rikard Lorén · Answer

okey, thx for all the answers ppl ! :)

Bill Gulley · Answer

Yes and the OP is in Sweden and I have no idea how long you might get to finance a 500 year old building, RE is a little different across the pond. :)

Rikard Lorén · Answer

Yeah, u R right, I haven't done any investing and is new 2 the game, atm I'm just researshing for info and trying to learn.
	
	So your telling me that a 25/30 year amortization loan is standard for multifamily ?
	And in it's standard to being setup:ed as: I will get a loan for 25/30 years ( it's written for that in the documents ) but the bank wants me to payback in 5-10 years ? or do u mean that the intrest is for 5-10 years and then it could be higher for the upcoming years, therefore it's set to 25/30 years so I/the bank got a little playroom ? I'm on the same page as u or I don't get it ?
	
	Well, I don't really know if investments is better outside my country but I belive that I will invest in sweden becouse I want to be where my investments are and have controll over them.
	
	
	and this part: 
	
	"but usually it's not fully amortizing; typically it's anywhere from 5-10 year term, depending, and the longer of that, being aggressive."
	
	Could u explain it a bit more ( having a hard time to get what u mean, IF it's not what I wrote above ) 
	
	*I have a little problems with the translate with some words, sry for that*
	
	//Rikard

Jared Rine · Answer

Rikard,

If this is a true posting, and it sounds like you are a new investor, no one is going to give you a loan for that long.

I'm a commercial RE finance broker and have access to all sorts of programs, and no lender will give you a 50-60 year loan.  On the conventional side, esp. for multifamily, some lenders will give you a 30 year amortization (period of life of the loan is written on) but usually it's not fully amortizing; typically it's anywhere from 5-10 year term, depending, and the longer of that, being aggressive.  Many lenders will give you a 25 year amortization due in 5-10 years.  That's what is most typical, so if you are going to be investing here in the U.S., you should plan your numbers accordingly.  Being a foreigner, you should also prepare for 30-35% down payment + CC/Fees.

If you need further help, please feel free to contact.

Thanks,

Rikard Lorén · Answer

*One more*

Is there any "generall" payback time on decided amouts ? like: 100.000 dollars shoulden't take more than a maximum of 25 years to payback.

And 1.000.000 dollars shoulden't take more than a maximum of 40 years to payback ? ( according to the bank/bankman )

Rikard Lorén · Answer

one more question came up: 
	
	I live in sweden so I don't know how it is here but where u are ( U.S ? ), is it easier to get a longer loan ? I mean, if ur deal with the bank works and both parts are happy, could you aswell say "hmm.I changed my mind, instead of 30 year, I wanna go for 50 year payback" and the bank man gladly says: Ofc, said and done, no problem at all" Or is it any stuff u have to calculate on ? I mean, it's better for you and the bank get more money, so why not ?  Thanks!

Bill Gulley · Answer

Long term, that can be a big IF! Good luck :)

Rikard Lorén · Answer

So as long as I can invest the difference after tax at a higher yield than I pay, I'm all good ? ( short said )

Bank loan, the longer, the better ?

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