Financing for 5 Duplexs

[Amanda Crawford]

Hi all!

My husband and I have a set of 5 duplexes under contract. We were planning to do 5 residential loans with 30 years at 3.2% interest, however since they sit on only two plots of land we are told we are unable to do residential. The property also cannot be subdivided in the future due to lot size requirements for a two-family property. So we are now facing a commercial loan at 20 years with 5% interest. This definitely lowers our cashflow below what we were looking and wipes out any chance of a BRRRR. We are curious to see if our Bigger Pockets contacts have any ideas or know of lenders that would be willing to work with us to get this package on a 30 year with a lower rate. Any help would be appreciated!

[Marty Johnston]

@Amanda Crawford there are definitely commercial lenders out there who can better fit your needs if you're open to a 5-6% Commercial Loan amortized over 30 years. These could be 30-yr fully fixed, 5/1 ARMs, 10/1 ARMS, or a hybrid which is I/O for the firsrt 5-yrs and then converts to fully amortizing over 25 years in yr 6 (no balloon). These are bank-alternate or secondary market lenders, so while rates are slightly higher than banks, these guys don't need tax returns, W-2s, pay stubs, etc. More in line with asset-based lending.

Hope this helps!