Commercial Multifamily Financing

[Matthew Dunn]

Dear BP, 

I had a quick question on commercial financing for my first larger deal, so I am pre approved from Freddie / Fannie for a $1MM purchase, I have literally just enough capital right now to do that, but limited extra capital for rehab. But my goal is obviously to add value via reducing expenses/increasing income. After rehabbing a prior quadplex, I have a good feel for costs per unit, the properties I like need new kitchens, floors, bathrooms etc. This will probably run me around $75k-$100k for a 16 unit $1MM deal. However, I don't like the ideal of using cashflow to improve units for a couple reasons, I see it as a slower strategy, I have to wait for cash every month to improve items, and what if there's a large capX issue, now I'm potentially stalled mid rehab with a vacant unit. I would rather have capital at the start to begin rehab on any month to month units, exterior improvements and get it all turned around and to market rents within 12 months.

Am I on the right track with that thought process, and if so what is the best way to fund the rehab? Is it possible to use a bridge loan at the start to buy the property and rehab it, then refinance it into agency debt? 

Thanks so much!

Matt