First deal under contract ... would love some financing advice!!

[Jamie Gruber]

What an amazing thing BP is. Always liked the idea of real estate, but not until I found BP did I appreciate concepts like finding a niche, reserves, what cash flow truly is, etc. My wife and I have decided on small multi family but and hold as where we will focus. We were looking for property when we came across 4 duplexes that need some work and are all owned by the same person. We tried buying one or two but he wanted to sell all 4. Full asking combined was $460k. He lowered to $395k, but my analysis showed $325k to be the price I'd be willing to pay...and he accepted (never thought he would!). So now, I'm under contract on these 4 properties. I've had conversations with banks previously and like a smaller regional bank that will do portfolio lending since I have a schedule E (forced landlord SFR that Ive had to hold onto). I talked to another bank that would do this as commercial. 20% down with a 25% amortization and a 5 year fixed rate period. The benefit would be putting the properties in an LLC. It seems to me going the personal route with the portfolio lender who offers a 30 year amortization with residential mortgages is the way to go. But I wanted to see if my logic is flawed. Apologies if I left out pertinent details. Thanks in advance for your feedback/questions!

[Patsy Waldron]

Residential mortgages are usually cheaper and better, so if your purchases qualify for one, get it! Fixed rate, low rate, longer amortization- all equal more money in your pocket. You actually *can* put the properties into an LLC after you close with your residential mortgage (there is a perennial debate here on BP about whether the bank will use the "Due on sale" clause if you do that, or if it will be happy to keep getting its payments).

Congrats and good luck on the deal- it sounds like a great opportunity!