New member from South Carolina

[Ken Walters]

Greetings All,

My wife and I live in Rock HIll, SC, not too far from the Charlotte, NC border. Recently we formed an LLC to pursue our dreams of buy/hold property.

As a newbie investor I feel the g-forces of the learning curve pushing back at me from every turn.  Fortunately, this website contains a wealth of knowledge and advice in the forums and podcasts, so at least it feels like I have a pressure suit on now. :)

If I had only read a bit further before we put an offer in on a potential rental, then I could have saved us some heartache.

Wrongly, I presumed, we would have financing in place.  We have a pre-approved loan for a primary home, so you can imagine my surprise when the bank told me they wouldn't finance the rental.  Oddly, our bank doesn't do commercial loans.  It was my understanding that commercial loans were for properties larger than four units.  

Could I get some advice on what a good commercial loan looks like? 

Thanks,
--Ken

[Seth Hayes]

Ken,

A commercial loan can be made for any non-owner occupied resident that is used for investment purposes. 

You are not off in your understanding regarding the number of units being a factor. Typically 4 units and under fit into one category, while anything with 5 units or more falls into another. Where you see the difference is in the lending requirements and costs associated.

You can obtain a commercial loan for a single family home to fix and flip, or buy and hold. Those are two different types of loans as well. While the fix and flip will be a short term hard money loan that lasts between 6 months and 18 months, a buy and hold loan will be longer term, with or without a balloon payment, amortized and lasting between 20 and 30 years. 

A good mortgage broker can save you the hassle of making 10 minute calls to 30 or more banks to try to find a lender that fits. They can take your information, find out what you are looking accomplish, then provide you with multiple lenders and options to choose from.