Interest Only Terms for Commercial Multifamily

[Anthony Greco]

Hi BP, I wanted to ask if anyone has experience with or insight on the ease or difficulty of getting an interest only loan on a commercial multifamily property? What does it usually take for a lender to agree to these terms and or what are they looking for?

[Anthony Greco]

I have been thinking of using it as a strategy to take the additional cash flow and dumping it straight back into the property at a more rapid pace to improve the property enabling the ability to raise and stabilize rents quicker therefore increasing the properties NOI. This is not meant to be used as a means of squeezing into a deal without the ability to pay down principle and interest in a traditional loan but more of a way to surpercharge the ability to turn around a mismanaged property. I am a very risk adverse person and would only go into a property knowing that in the worse case scenario the property could still cover the debt.