Question about financing for 4+ unit buildings (Los Angeles)

[Account Closed]

When searching for a loan for 4 or more units, would I reach out to a mortgage broker, or go straight to a bank?

Thx!

[Joshua McGinnis]

Hi @Account Closed

Are you going to be living in one of the units or buying it as an investor? As you may already know, investor rates are going to be higher and will require a larger down payment (usually >= 20%). If you'll be living in the property, that potentially opens up FHA as an option which would mean you'd want to find a lender who knows and can submit FHA loan applications. The type of loan that works for you really depends on your strategy.

I'd actually try and reach out to a few local credit unions and banks and ask them what kind of multi-family loans they're looking for. You can often get a great deal if the bank plans to underwrite and maintain the loan in-house as a portfolio loan.

Of course, reaching out to a mortgage broker or two and getting pre-qualified isn't a bad idea. They'll be able to give you a good sense of the type of terms you'll be able to get based on your credit and finances.

Whatever you do, make sure you get pre-approved before making an offer. The market is insane in LA right now and in most cases, you're offer won't even be looked at if you don't include a pre-approval letter - something you don't want to risk when going up against the large influx of all-cash buyers.