Triplex Investment Property Financing

[Eric Dame]

I have a triplex under contract and have received the following finance option from my local bank. I have a longtime relationship with them and my credit is excellent. I’m going to pay cash initially because the triplex closing will happen prior to the loan being ready for closing.

Price for triplex $ 220,000

Loan Amount - (70% Loan to Value)

Rate – 4.66%

Term – Amortize 15 year period with a 10 year term. Repayment will consist of monthly Principal and Interest payments based on a 15 year amortization, however, will mature in 10 years. At that time we can renew/restructure/payoff

I was hoping for 20% down and 15, or better, 30 year term

Feedback...

[Jerry Padilla]

@Eric Dame

Yes, probably too close to closing date to try and close with purchase financing. If you pay cash, you can cash out with delayed financing prior to 6 months with conventional - which is where you will see the lowest rates.

Yes, doing some improvements to increase the value and rents will help you get more money back out when you cash out refinance. Since you haven’t closed on the purchase yet, Here is a tip;

If you include on your closing statements (which vary state to state - HUD-1/ALTA statement ) the renovation costs - and have them charged at closing...... This renovation cost now becomes an "initial closing cost" and can be included with the max that you are able to pull out prior to 6 months. With delayed financing you are limited to pulling out a maximum of your initial investment.

For a triplex it will be 70% LTV that you get back when you cash out.