Financing requirements for 5units and above

[AL Brown]

My goal for 2017 is to purchase a 5 or 6plex. My question to the BP family is what's the criteria the banks look at in doing so vs 4 units and under for the borrower and property itself which I have successfully acquired in 2016 and looking to increase my portfolio.

[Nathan Click]

@AL Brown - My expertise is commercial financing, which would be a good tool for what you are doing. I'd plan for 25% down and make sure the property has good cash flow. Your DTI is not as important on the commercial lending side but DSCR is. This means the property has to be able to pay you and the bank. Also be sure that you have set up your business entity, this could be an LLC (most popular), S-Corp, or C-Corp. The business will own the property and you will own the business. If you are buying several properties you can set up subsidiaries as well. You will still need a good personal credit score as a personal guarantee is still required. If you have any other questions feel free to reach out to me.