Best way to finance a larger 10+ multi family building??

[George P George III]

 I have been kicking the idea around in my head on buying a larger 10+ unit building and most of the banks have either said they don't finance on larger than 4 family or it would be a 5 to 7-year balloon note that is then amortized over 20 years for payment and than renegotiated after the term. I just would like some insight on what you all have done that works and what options are out there. 

Thank you.

GG

[Alex Bekeza]

@George P George III There are also wholesale options that mortgage brokers have access to for small balance commercial like this that will be 30 year terms fully amortized on 5 + MF, Mixed-Use, and even some commercial property types. Rates can be a tad higher (figure the 5-8% range depending on a wide variety of factors like FICO,LTV, size, property type, etc) but the 30 year terms can often provide improved cash flow over the shorter term notes from local banks. Also, many 10 units in the mid west/south don't qualify for Fannie/Freddie due to the smaller loan sizes so these become especially handy since they'll go as low as $250,000. Most investors have no idea they can lock up 30 year fixed terms on these property types.

@Scott Runyan brings up an excellent point regarding net worth/liquidity and it's even more important when the borrower does not have previous 5 + MF experience.