Financing First investment - multi fam in KS

[Amit Raghavan]

Newbie from San Francisco and have been learning, absorbing as much info from all the amazing professionals and contributors here. After doing a lot of research, I’ve decided to focus my efforts out of state and initially in the MO/KS (primarily Kansas City areas).  I also refer to one of the forum posts about ideal KC neighborhoods/zip codes and it’s been invaluable.

I am focusing on multi family units and actually am serious about investing in a KS multi family unit - 6, 1 bedroom that cash flows well.  However, since it’s over 4 units our lender requires me to seek commercial financing and he doesn’t provide that. 

Any experience brokering such a deal? I don’t know who to contact in KS and I assume the financing and insurance costs may go up, thereby bringing my CF down?  I can simply walk away and focus on fewer units (4 or less) but I would like to get some perspective from folks here.

Appreciate it! 

Amit

[Chris Dawson]

@Amit Raghavan, I can give you the names of a couple of lenders who can do commercial financing.  Interest rates are usually a little higher for commercial and they are usually amortized over 20 years instead of 30.  You will also have to put more money down.

I purchased a 6 plex about 11 years ago in KC MO using commercial lending.  I actually used hard money to purchase the property and rehab it, then I refinanced it into a commercial loan.

Don't shy away from a deal just because it will be commercial financing.  Find out what your financing costs will be, run your numbers, and if it fits your criteria, then go for it!