Financing options for 14 units (7 duplexes)

[John Clark]

My current rentals are all SFH with only one of them having a mortgage. MY plan was to continue with SFH until I stumbled across a 14 until (7 duplexes) for sale that looks promising. But that's the sticky point, it looks promising.  I want to run the numbers with the BP calculator but I don't know enough about financing multi family. 

My understanding is that I would need a commercial loan, which leads to a lot of questions.  But for the sake of the BP calculator, what are the going interest rates and what is the required minimum down payment. 

Any help would be appreciated along with any potential loan sources.  Thank you

[Gino Barbaro]

@John Clark

there are certain criteria that banks look at. One is DSCR, and they want at least 1.2. The banks also look at cap rates and focus on operations of the property, and not as much on comps. the standard downpayment is 20%, but I just closed on a large multi today with my partners and the bank required only 15% because we have a great relationship and the bank wants to underwrite this specific type of asset. On our last deal, we were able to purchase 280 units with the seller providing the 20% down payment in the form of seller financing. You can be very creative with multis.

Our partnership has allowed us to present strong personal balance sheets to prospective banks and to be able to buy larger assets.

Good Luck

Gino