6 Unit Multi Family Refinance

[Jeff Plotkin]

I’m working on a deal where the seller has promised to owner finance the deal for 18 months. I want understand how the refi could work when the term is coming due.

Does anyone know the typical seasoning period of multi family investments? At what point should I start lining up the refinance?

[Brent Shryock]

If you are planning to "add Value" and recapture some equity once seasoning occurs, then most lenders will want to see at least 2 years of seasoning to get to the new value.  Under 2 years, the lender typically will look at (Purchase price Plus your additional capital in improvements) as your total cost basis and lend on that number.  

I would start looking for lenders at least 6 months prior to your term ending.  This will give you cushion if there are market shifts and allow you time to find suitable lenders to take it down for you.