Loans for multi housing, 8+ units

[Spencer Hartz]

Hey all,

I bought my first single family home (600 sq/ft) in 2016 for 96k using a conventional loan. Occupied and rehabbed it for 2 years before renting it out and buying another home (550 sq/ft) for 90k in 2018. Same plan with the second home. Each house is now rented and and nets about a 35% profit.

I’m not pulling anything from my investments and am even saving on the side through my day job for my next investment. My question is, what is everyone’s experience with loans and financing options for larger properties? I’m okay doing more single family rentals because the formula is working, but I want a more clear vision of how and when to get into something larger. Any insight would be helpful.

Thanks for all who share here. It’s so helpful reading everyone’s stories.

[Corey Hawkinson]

@Spencer Hartz If you ever want to have a further discussion with a local banker feel free to reach out. What the others have said here is true, although I would add that even with a commercial loan you would still guarantee the loan so your personal information does matter. It sounds like you have sufficient income outside of the potential property so that’s a good sign for you. Some people here might find commercial loans without personal guarantees but they are most likely either putting a higher percentage down on the initial payment or they are very established.

I’m not pushing you to go with me or my bank. I’m just willing to offer any insight I can as a banker who is also an investor. (Though personally the largest property I own is 4 units) In fact, I think anyone considering expansion should have discussions with multiple banks / credit unions.