Commercial Lenders in Pennsylvania

[Scott Garber]

I have used the same bank to purchase 3 SFR and 2 duplexes which are cash flowing very nicely. I came across a deal on a 6 apartment property which originally was $349,000, reduce to $299,000, and the owner agreed to sell it to me for $199,000. He’s an 83 year old gentleman who’s owned the property for 50 years and due to his age he has neglected deferred maintenance the last couple of years, and has not raised rents to fair market value. I thought the bank I was using would jump at this, as it cash flows and has the potential to cash flow even more once I raise the rents and decrease the water bill. My options are these: 1) look for a commercial lender in PA that might take this on. 2) get a partner to go in all cash, bring it up to par, and refinance later. 3) hard money loan. I have assets, multiple properties, multiple businesses, and a pretty strong balance sheet. With the stock market down considerably I don’t want to sell to cover this property but have enough cash for the down payment. My credit is over 800, so that’s not an issue. Do you have any creative ideas, lending contacts, or know a private lender who might be interested? Thanks

[Dustin Lauer]

I am interested individually, but I'll post here with advice only and if you would like to discuss further that's great too!   Thoughts - technically over 4 units you are in small balance commercial territory for financing.  You'll likely want to first explore more local banks for a portfolio loan.  Portfolio is this case means the bank will hold the loan, not a blanket of course.  If that doesn't pan out you there are very very very few lenders that will offer a "small balance commercial" loan under $250,000. If you can find 3x financing PA that will lend more than 60% PLTV I'd be very surprised.  My company and a few others will likely be the lot of them.  Option 3 - if banks and small balance commercial lenders do not work out for you or have agreeable terms, I would solicit the seller for seller-financing.  He/She is already comfortable with the asset of course, AND you already know that financing is hard to come by for this asset type, so you can likely assume he/she owns in without much debt and has the financial capability to finance it for you.