Help figuring out a lending issue for deal w/multiple buildings

[Brian H.]

Hi!

So, I am under contract for 11 rental units in 5 buildings. 3 units in one, 2 units in the other four buildings, all on two side by side properties.

I am being told I cannot, per Fannie and Freddie guidelines, finance this with conventional 30 Y residential lending. I was told I would have to originate a conventional loan for each individual building, even though the seller has the bundled in one package.  This would be complex and obviously cost much more in regards to title searches and policies... 

Is commercial the only option here? Normally I would have figured this out before the offer but I had to jump on this deal because it is an incredible opportunity... but now I need to figure out how to finance it.  I have maybe 30k covered from private investors. I was going to use that as part of the down payment to keep as much capital in the business as I can... but I know I cannot line up anymore from private investors that I know.  

Anyone here have experience with a situation like this? Curious if I could grab any advice on how to proceed with this...  The commercial lending seems much more expensive and I am not sure I have been in business (~1 year) long enough or can show enough revenue to qualify in the first place. I can't stand the thought of losing this deal. It is one of those amazing, rare opportunities.

Thank you so much!

[Chris Mason]

Originally posted by @Brian H.:

Hi!

So, I am under contract for 11 rental units in 5 buildings. 3 units in one, 2 units in the other four buildings, all on two side by side properties.

I am being told I cannot, per Fannie and Freddie guidelines, finance this with conventional 30 Y residential lending. I was told I would have to originate a conventional loan for each individual building, even though the seller has the bundled in one package.  This would be complex and obviously cost much more in regards to title searches and policies... 

Is commercial the only option here? Normally I would have figured this out before the offer but I had to jump on this deal because it is an incredible opportunity... but now I need to figure out how to finance it.  I have maybe 30k covered from private investors. I was going to use that as part of the down payment to keep as much capital in the business as I can... but I know I cannot line up anymore from private investors that I know.  

Anyone here have experience with a situation like this? Curious if I could grab any advice on how to proceed with this...  The commercial lending seems much more expensive and I am not sure I have been in business (~1 year) long enough or can show enough revenue to qualify in the first place. I can't stand the thought of losing this deal. It is one of those amazing, rare opportunities.

Thank you so much!

 Yup, this is a commercial financing scenario if you want one blanket mortgage (that's the google search term btw) on them all. There will still be 5 title searches and 5 title insurance policies, so not much of a difference there. 

You could do it as 5 concurrent Fannie loans which would be a pain in the  butt, however at the end of the day it would be better financing.