Financing for 3 Fourplexes

[Matt Morand]

I'm looking at buying three four plexes and am confused about my financing options. Would I have to buy them all separately or could I do it with a package loan? I appreciate any responses

[Jeff Kehl]

@Matt Morand I bought 3 4-plexes together a few years ago. I just used a local bank that held the loan (portfolio lender). You can find them by just searching for the local banks and credit unions near the property.

Their financing will typically be worse than standard residential financing. You'll likely get a 5-10 year term loan ammortized over 20-25 years and the interest rate will be 100-200 basis points higher than a residential loan.

If the buildings are located on 3 separate land parcels and you have less than 10 loans you have a better option. That would be to get standard, conforming Fannie/Freddie loans on each individual property. To do that, you can go into any lender or broker. The loan will be 30 year fixed with a lower interest rate and the originator will be selling it off into the secondary market.

The second option can be a pain because they will require all kinds of paperwork but the better terms are worth it.