Recommendations for 5+ and Mixed-use Properties

[Connor Hibbs]

Hi All,

I've noticed that a lot of lenders have pulled away from 5+ unit properties and Mixed-use properties, particularly when it comes to long term financing. I know that LTV's are significantly lower for these types of properties than for 1-4 units, but if anyone has any recommendations for direct lenders it would be much appreciated.

[Brandon Croucier]

Hi Connor, would love to help you out, I'm seeing 75 LTV on a 5+ Unit all day long!

[Zach Edelman]

I would recommend checking out BP's list of recommended DSCR lenders and seeing which of them do 5-10 units and mixed-use. Would be a good way to narrow down your search.

[Jason Wray]

Conner,

We are still doing them just a few things to keep in mind like the 25% down and making sure that the DSCR ratios are 1.25% or greater. You also have to consider loan amounts typically need to be above $250K will carry a 3-5 year prepayment penalty.

The biggest thing I see is loan officer are quick to offer a pre-approval for you but the fail to run the DSCR/Rents ratios up front. No point of offering an approval waste a buyers time if the rents do not equal 1.25% or greater. You also have to do research on a few other things to avoid a suspended file in underwriting so this is why many lenders have stopped doing them.

The "failure rate" or "Pass-through rate" is where the loan officer is fighting to get an application to make a paycheck and it taking anything they can get but not putting in the work up front to avoid lost time, lost earnest money, and lost clients for realtors!

[Erik Estrada]

Quote from @Connor Hibbs:

Hi All,

I've noticed that a lot of lenders have pulled away from 5+ unit properties and Mixed-use properties, particularly when it comes to long term financing. I know that LTV's are significantly lower for these types of properties than for 1-4 units, but if anyone has any recommendations for direct lenders it would be much appreciated.

It is very tough to finance these because most properties and borrowers do not qualify for the financing criterias on a competitive CRE loan.

I would advise to have everything upfront. DO not waste time shopping for rates. Work with someone who has actually closed on a 5+ unit deal recently. The DSCR depends on the type of lender but it is typically 1.25, although a few will accept 1.15. Value is also important as well as experience and FICO.

[Givo Aghasi]

Would love to help out, I'm seeing up to 75% LTV on 5+ Unit and mixed-Use. Loan amount, fico score, experience and occupancy play a factor. 

[Trent Jones]

Quote from @Connor Hibbs:

Hi All,

I've noticed that a lot of lenders have pulled away from 5+ unit properties and Mixed-use properties, particularly when it comes to long term financing. I know that LTV's are significantly lower for these types of properties than for 1-4 units, but if anyone has any recommendations for direct lenders it would be much appreciated.

 Connor,

Would be happy to help you with any 5-8 unit or mixed use property loans you may need. We are a direct lender who specializes in real estate investment property loans. Will send you a PM.