Personal creditworthyness-based financing for commercial property

[Scott Dupree]

Im just starting out learning about real estate in the Pittsburgh area. I started out looking for a duplex or triplex but there is a very strong sellers market here. Both SFR and multi family are selling instantly for up to 10% over listing price which makes it very hard to make the numbers work on a property. After a while Ive started to look further up in number of units and have started considering small apartment buildings.

I found a 10 unit that seems like a good deal but needs significant rehab. Its currently only half rented and has a lot of investment needed before it can be fully rented out at reasonable rents. The problem Im running into is that commercial loans are given primarily based on the metrics of the property and only secondarily on the creditworthyness of the borrower. The apartment is listed a little under 400k and could probably soak up 100k of imrovements to be ready to make a decent income. I make a little under 200k/yr, have around 200k in liquid assets, have an excellent credit score, and live very modestly so under a normal mortgage I could easily qualify for something like that but normal mortgages arent allowed on commercial.

The common alternative to that would be using a hard money lender. The problem is that (from what I read at least) hard money lenders are usually there to bridge the gap between getting a property rehabbed and stabilized so that you can refi into a normal commercial loan with good property metrics. 

Because this is my first deal, I would prefer to treat this as basically making a large house (I plan to live in it) purchase that happens to have more upkeep expenses than usual. Im totally alright with the worst case scenario being that everything goes absolutely sideways and I end up just paying high taxes and maintinence on a large "house" because my income is more than enough to support it. Of course, my intention is not for that to happen and turn it into a good income producing property as soon as I can, but if I went with a hard money lender that would leave me with terrible terms if I didnt manage to turn it around very quickly. To be conservative I would rather assume it will not go perfectly as planned and I may end up taking some time before I can get everything sorted.

In summary, do any of you know of options which I can get financing for an apartment which leaves a wide margin for error and relies mostly on my personal ability to repay the loan? I find it strange that I can qualify for a 500k jumbo mortgage but cant get a 300k commercial mortgage purely based on the fact that one has more units (and actually more potential for income even). Any insights appreciated!