Current Rates for 6 Unit Multifamily

[William Coet]

Hello,
Trying to get a ballpark on what the current best terms and lenders are for 6 unit multi-family.

Lowest origination fees, Lowest APR.

Thanks

[Devin Peterson]

There are a lot of variables involved here.

Min down payment requirement to meet min DSCR would most likely be 25%

Whats your estimated credit score?

Do you have and previous rental experience?

[Robin Simon]

Quote from @William Coet:

Hello,
Trying to get a ballpark on what the current best terms and lenders are for 6 unit multi-family.

Lowest origination fees, Lowest APR.

Thanks

If you go the Multifamily DSCR Loan route (instead of more traditional bank financing) rates probably anywhere from 8-10%, however, monthly debt service tempered by 30-year am and 10-year IO options

[Michael K Gallagher]

@William Coet this is likely going to be quite variable and be determined by your relationship with the institution you are seeking to do business with.  You're likely to get the best terms at a local or regional bank that keeps their paper and services their debt themselves.  

[Simmy Ahluwalia]

@William Coet - depends.  If the loan amount exceeds $1M, then rates are in the high 6's to mid 7's.  If below $1M, then best case is 7's, depending upon the dscr.

[Chris Mason]

Quote from @William Coet:

Hello,
Trying to get a ballpark on what the current best terms and lenders are for 6 unit multi-family.

Lowest origination fees, Lowest APR.

Thanks

 Hi William,

In the absence of information to the contrary, I'm assuming perfect everything: a well qualified and experienced borrower, good cap rate, good building, good neighborhood. I'm further assuming that both your personal home, and the property, are both in Lancaster County. 

Points for the below range from 1.25% to 1.75%, inclusive of broker fee. The one at 40% down has no prepayment penalty, the ppp on the others matches the fixed term. I didn't specifically seek out anything like 30 year amortization or non-recourse, etc, so none of that surfaced. This is one regional player, one statewide, and one national.

The price of answers to "but what about if..." is a phone call. :P

[Olu Efunwoye]

Quote from @Simmy Ahluwalia:

@William Coet - depends.  If the loan amount exceeds $1M, then rates are in the high 6's to mid 7's.  If below $1M, then best case is 7's, depending upon the dscr.

 @Simmy Ahluwalia Would you take a look at my scenario here and advice if you have a better option for funding? I am pretty much open to investing across the country but currently looking in MD, DC, VA, GA
Thanks https://www.biggerpockets.com/forums/49/topics/1187335-need-...

[Kevin Zeng]

Just finished a deal a few months ago during the down turn into high 3's on the 10 yr treasury. I scored a 5.9% with my bank on a decent size loan but that is with a 40% down with really good cash flow. I shop around a bit and used a broker, which honestly worth every penny right now. 

Right now I think rate would be around 8% if you start off with most banks and lack connection. I would worry more about the ACTUAL cost like insurance, water bill and fixing post purchase.

Looking for investor now to get myself another building during this bad time.
 

[Chris Mason]

Quote from @Kevin Zeng:

Just finished a deal a few months ago during the down turn into high 3's on the 10 yr treasury. I scored a 5.9% with my bank on a decent size loan but that is with a 40% down with really good cash flow. I shop around a bit and used a broker, which honestly worth every penny right now. 

Right now I think rate would be around 8% if you start off with most banks and lack connection. I would worry more about the ACTUAL cost like insurance, water bill and fixing post purchase.

Looking for investor now to get myself another building during this bad time.
 

 Having an 8% rate expectation is fine b/c that just means conservative investor underwriting, but most things right now are winding up in the high 6s on the low end (well qualified borrower, sexy property like you describe), mid 7s on the high end. I did lock one in the low 8s the other day, inherited property, borrower's only experience was in severely mismanaging that very property (hence needing cash out...), very low liquidity. That loan will have some bank hand-holding that people dislike (annual reporting requirements for the first few years, all rent checks must get deposited into an account at that specific bank so they can see it coming in and have an automatic "early warning signal" if they drop off, etc), but hey in their case I'd say it wasn't unwarranted, their only track record is that of mismanaging after all. 

I guess the takeaway from this is that these aren't home loans, there isn't a single narrow bell curve representing a very narrow range of rates that everyone with good credit gets (the FTHB spazzing over the rate being 0.25% this way or that have no idea how good they have it, lol).