Commerical lending Multi Unit

[Bernard Chouinard]

Hi – This is a stretch but I’m throwing this out there in hopes that someone can provide some advice or suggest methods I maybe over looking not thinking of.

Up front I know very little about commercial financing other than its based more on the building (NOI) than the person. I have been provided an opportunity to look at buying 4 buildings 16 units total. Building is just outside of Worcester, Massachusetts (Central Massachusetts).

I’m getting all the details but for the sake of this post high level over view is

$900K Asking price

$168K if all units are rented

$30K annually in expenses.

11 Units are rehabbed and rented 3 units are left to be finished then rented. Based on this very high level view does this sound like a deal to look into further?

The problem? I only have $30K in liquid assets to work with for down payment and if commercial lending is anything like residential I don't have the down payment needed. I've offered seller to hold the note for 12-18 months then refi into a conventional loan. Does that even seem possible? I know that works with BRRR as you're buying distressed multi's but this is not the case here. Hearing the sellers situations I don't think this would be ideal for him so its doubtful he'll go with for it.

A suggestion of having the seller hold the note of the down payment? So if down is 25% he would hold a note for $135K while the rest if conventional. Would banks even allow this?

These are just beginning conversations, I’m aware I need to do much more research on the properties as well as the commercial loan process but figured I’d would throw this out there to hear of any suggestions/recommendations. If you want to discuss a partnership in some way feel free to PM me I’m open to hear any suggestions.

16 units, in 4 buildings. 13 Finished, 3 would need finishing to rent. Currently 11 are rented.

Residential and Commercially Zoned

1,2,3 and 4 bedroom apartments.

Centrally located 2 blocks away from Spencer center.

Close to shopping, restaurant, public transportation, schools, church, town athletic fields, and the sportsman's club.

Off street parking for tenants.

Buildings have lead certificate.

New water and Sewer lines

New Gas lines

New Electrical Services with Sup panels.

Updated roofs on 3 buildings.

With all 16 units rented, rental income would conservatively be around 168,000 with reasonable rents.

Expenses are currently $30,000 annually.