Lender · Easton, PA · Member since 2019 · 90 posts · 32 votes
Hello, I am about to purchase my first investment property but I am slightly wary on which loan I should use. My plan is to acquire an empire as I am sure is many others. Having this goal in mind, I created an LLC and started searching for someone to finance my first property. I quickly realized obtaining a commercial loan with no history is near impossible. After talking to a few banks, I searched for residential loans instead based on not having the 5yr bullet, higher down pay etc. Today I received a call back from one of the commercial lenders saying they would do the loan. The terms are along the lines of 6%int, 20% down, 5yr fix over 20 years total. This is the only offer I have received yet. To make it a bit more complicated, I am 21 years old and therefore have barely any substantial income. I am looking for advice if this is a good deal, and will benefit me or if this is a dangerous path (The loan type). Thank you so much.
Rental Property Investor · Greenwich, CT · Member since 2015 · 4k+ posts · 2k+ votes
7y
@Cole Farrell, those terms aren't terrible for a commercial loan, given your new to the game.
If you find a good deal that will cash flow appropriately with those loan terms, then get to it. You should keep in mind that most commercial lenders will want to see 6 months of reserves at the time of closing.
Why not take a different route and try house-hacking a multi-family? Something like this, purchased with a FHA 203(k).
Lender · Easton, PA · Member since 2019 · 90 posts · 32 votes
7y
@Diana Muresan Oh oh I see now. I researched it a bit, now I understand. I found a lender near me that offers it. It seems an amazing option for me, thank you very much.