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Updated about 1 year ago on . Most recent reply

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Manan Shah
  • Rental Property Investor
  • Edgewater, NJ
4
Votes |
9
Posts

4+ unit properties

Manan Shah
  • Rental Property Investor
  • Edgewater, NJ
Posted

Hello,

I am looking at 2 properties, one 2 unit property that I have put in an offer of about 120k that can generate positive cashflow of $600 per month and another which is a 6 unit property where I have put in an offer of 350k that can generate $2000 cashflow.

I have a bank ready to lend a mortgage at 7% for the 2 unit property. However, the bank indicated they cannot finance the 6-unit property and I would need a commercial loan for it.

Can you please let me know how commercial property mortgages differ for a residential property mortgages and if there would be a substantial difference in rates? Based on the information, would it make sense to move forward with the 2 unit property or a 6 unit one? It seems that the 2 unit generates only $600 monthly cashflow. However, I could add more smaller properties to build the cashflow.

Any guidance would be great.

Thank you.



Most Popular Reply

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1,206
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1,514
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Samuel Diouf
  • Real Estate Agent
  • Columbus & Cleveland, OH
1,514
Votes |
1,206
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Samuel Diouf
  • Real Estate Agent
  • Columbus & Cleveland, OH
Replied

Hey Manan, it depends on your experience and knowledge in the business. The larger multifamily properties can create great cash-flow but you can also make costly mistakes.

As for the difference in loans, I can send you a list of lenders in Ohio. Commercial lenders will be able to answer this question accurately for you. 

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