Best way to finance 6 units (3 duplexes)

[Jordan Whitworth]

Fellow BPer's, 

I've done 3 or 4 deals already with traditional financing but I have an opportunity to potentially buy 6 units (3 duplexes) with a partner. We can still afford/qualify 4 of the units under traditional financing if we choose but the last duplex would need a portfolio lender due to qualifying issues with DTI. We have enough cash to comfortably buy 4 units but the last two would squeeze us pretty tight. The deal will cash flow really well and could still continue to appreciate over the next few years.

Anyone had experience on putting a deal like this together? Buy all under 1 portfolio loan? buy some traditional some portfolio? Maybe get a LOC to fund some of the purchase of the last duplex to keep some of our cash reserves and pay off the LOC over the next year or so?

Just looking for best practices on something like this. 

Thanks! 

[Anthony Dooley]

It's not a portfolio loan, it's a commercial loan. Buy the whole thing with one loan and one closing. You will need 25% down and the rents will need to produce 125% of the debt service. Most likely it will be a 5/1 ARM with a 20 year amortization. The lender will prefer that a professional property management company handle the management rather than you. Keep it simple.