Commercial Multifamily: What You Wish You Knew

[Mark Grozen-Smith]

Hey BP Friends,

I'm an investor with a few duplex/triplexes, but this has all been residential. 

I'm now putting in an offer on an 8unit. I'm working with a commercial lender for this of course, but I don't yet know the differences here from conventional residential investing. 

What do you wish you knew from the start about investing in >4unit multifamily properties? I need to figure out what I don't know yet!

Thanks,

Mark

[Account Closed]

<4 unit is residential loan, more borrower's credit based lending. >5 units is commercial loan, more income/expense of the property based. For commercial loan, you need to figure out the NOI to debt service (mortgage payment) ratio. Most lender requires ratio greater than 1.25.