Financing

[Tyson Edell]

I am new to Bigger Pockets and I thought I would a question.

I'm looking to buy a Multifamily Property in Florida. I will have approximately $200,000 to put into the deal. This would be my first commercial property but I currently have three 2-BR townhouse rentals.

My question is: Should I buy a property with cash OR should I try to get bank financing? I would prefer to get bank financing and get into a bigger building. For example: I could buy an 8-unit building for cash ($200,000) or possibly a 22-unit building for $600,000.

Would any bank take a risk and loan me $400,000? Let's say both properties were 90% occupied and were very solid. My current net worth is around $500,000 and our household income is around $160,000. Does anybody have any "gut advice"?

I appreciate any input you may have. Thanks!

[Jeff Greenberg]

Just a reminder that the down is not your only expense in a commercial purchase.

Closing cost

Due diligence( inspections etc)

Insurance prepay

Ultility deposits

Operating account startup

Immediate repairs

Capex reserves ( May be required by lender)

Etc.

200k is not going to yield a 33% down on a 600k property