Small Multifamily financing

[Stephen D.]

Hello everyone. I’m trying to find my way into multifamily investing and I’m trying to find a property that I can reposition usIng seller fInance. I plan on financing a few years down the road once It Is stablized with proper fInancials to show the lender. If I were to do this with a 5-7 unit and say the property is stable enough. With thIs beIng my fIrst deal with a commercIal property, would I qualify once I show the results? Or would I still need a key principle. I know I need to talk to a lender to find out, but has anyone here had this experience?

[Seth Williams]

@Stephen D. ofcourse. Here is the deal I did in detail: 

Market value at the time, 690k. Purchase price, 740k. Seller financing, needed to bring 50k to closing, and did 2 notes. 1st mortgage was 665k, 5%, 30 year amortization schedule, balloon in 5 years. Plan was to pay this off in 2 years or less. 2nd mortgage was 25k, 10% interest only, 120 day pay off. 

Rents at acquisition, 1500 - Vacant - 2000. Has multiple parking spots, including 2 parking areas / 2 car garage. Coin op laundry 1 set. 

Turned over 1500$, eviction, tenant left, re-rented at 1900, then 2100. Vacant unit was rented for 2250, and is  still occupied today. Acquired the building in Nov 2016. 3rd unit, asked them what they could afford, great tenants, we are @ 2250$ currently. 

Added a second set of coin op, that made my coin op revenue around 300$ a mo. 

Rented out both garage spots at 225$ a piece to tenants / neighbors. 

Held for 18 months, saved the $, refinanced the property with 3 strong leases etc. Appraised at 890k. Pulled out about 60k, paid off the private note, locked in a 30 year fixed at 4.75%, and paid of the 120 note within the time frame with savings / rents. 

All worked out well!