Trying to refinance a 4-plex

[Jennifer S.]

Hello! I'm interested in refinancing my four-plex in Los Angeles and using the equity to purchase commercial multifamily. 

When I spoke to a couple of commercial lenders towards the end of 2019, I received the following:

- Lender #1: 6.49% variable interest rate with $480k limit

- Lender #2: 5 year arm – 4.875%. 7 year arm – 5.25 % with $1M limit

I was expecting a lower FIXED interest rate, and a higher limit from the 1st lender. 

Has anyone received better terms for a multifamily (less than 5 units) and buying a commercial multifamily?

Any recommendations on courses that would help to understand commercial loans and the underwriting process would be helpful as well. 

Thank you!

[Anthony Wick]

@Jennifer S.. Look for local banks that hold their loans in-house. Now, in Cali? I have no idea if those things even exist. All of my commercial loans are fixed interest rates, with 7 year balloons. If you want something like a 20-25 year fixed rate, expect to pay much higher interest rates. Also, go back to the bank with the 4.875% offer. That was 2019? Rates have become much better in 2020. My cash out refi's this year are: 80% LTV, 25 year amorts, 3.6% interest, 7 year balloons, no escrow for property tax or insurance (much lower closing costs with no prepaids). Local bank, local properties.