Bundle Houses for Commercial Financing & Down Payment

[Drew Castleberry]

I'm working on a deal to purchase 6-10 properties and am looking at commercial financing rather than portfolio due to better rates and terms from my lender. On the deal, I'm able to purchase all the homes at roughly 75-80% of the appraised value of the properties, they're all recently renovated, fully occupied with market rents.

My lender requires 75% LTV and I'm able to use the equity as the down payment which is awesome, so I'll only have to pay closing costs. I have 2 questions for all you fellow investors that have utilized commercial financing:

1. Is 75% LTV the norm, or is it possible to find 80% LTV? If I can find a lender that will provide 80% LTV and I have greater than 80% equity, I'd like to roll the closing costs into the loan to reduce and/or eliminate my out of pocket costs.

2. Has anyone bundled properties into one loan? If so do you recommend it? By doing this with my lender, I can reduce my rate, origination points and even get terms for a 30 year fixed with no balloon payments. Plus I think it would be a lot easier to only have to make one mortgage payment.

[Dave Carpenter]

Drew, I am doing a commercial loan right now using 75% LTV on equity from properties I currently own. The banker I AMA working with originally said I could possibly get 80%, but the board for the bank didn't feel comfortable giving me 80% since I had never worked with them before and had not purchased the mixed use properties I am hoping to buy.
All in all, 75% does seem reasonable, though 80% might be found with another bank.
Good luck!