College House Lending

[Robert Lindsley]

Hi there,

I'm making an offer on a college house.  It's a 15 bed/6 bath rooming house and I'm trying to figure out how best to finance it.  The property is legally designated a rooming house.

I spoke with a mortgage broker and he told me that they would only invest in this type of property as part of a portfolio loan.

Is this something I can get financed through a bank or should I go the private/hard money route?  The numbers on the property look great so it would work for either an asset-based loan or a bank loan (if banks loaned on this type of property).

The numbers:

$319k (with an ARV of $319k)
15 bed / 6 bath
Gross rent: $9050/month
Mortgage: $2799.45 (100% financing at 10%)
Total Operating Expense $4754.34/month (Maintenance 17%, CapEx 10%, Vacancy 7%, tax and insurance included)
Monthly Cashflow: $1496.21

I've never invested in this type of property before and would love your thoughts.

Thanks!
Robert.