first time 5-plex financing

[Shivi Thanapal]

Hello, 

We are under contracts for 500K 5-plex property in Louisville. This is our first time with above 4 -plex properties. I am looking for financing this deal through commercial mortgage lenders but with proper leads. Any suggestions on how to go about it?

[Marty Johnston]

@Shivi Thanapal you have options in the price point! When is your closing date? Do you have 30-days? The biggest thing is you'll want to ensure you have enough time for a commercial appraisal - these are much more extensive than 1-4 unit properties and cost 3-4x as much usually. They'll also need to be ordered by your lender (whomever you go with), so timeline is important!

1st question I always like to ask - have you approached local banks and credit unions? They will often offer the best terms, but expect the thorough underwrite (2-3 yrs personal and business tax returns, Debt Schedule, PFS, etc). If they say no, or can't meet your timelines, then looking at the secondary market lenders are gonna be your jam! Low-doc, asset based, and overall much easier mortgage process with faster turn times. The downside is rates are usually a little higher, but on the flip side too, you can also obtain 30-yr financing vs banks and credit unions who are often 25-yr ams, on 5-10 yr balloons. So even if higher rates, often times the 30-yr ams match up on cashflow vs the banks.

Let us know your timeline, who you've approached, and CONGRATS on your first Multifamily!