Residential Vs. Commercial

[Kathy Henley]

There are many multi-units available in St. Louis.  The brick buildings are up to 80 years.  My criteria includes updated windows and kitchens; new roof; and updated plumbing and electric panels.  Thanks to many re-hab investors, there are quite a few opportunities. So why not go bigger?  Rather than a gutted, rehabbed duplex or 4-plex, the gutted and rehabbed 6 unit building is very attractive. All three fit my criteria.  All three pass my 1% rule.  But the 6 unit building falls into the commercial loan department.  Why does the commercial loan get a bad wrap? Bank #1 and #2 have similar basic terms, 20% down, 3 years fixed at 5%, with an adjustment at the 3 year mark to 'current market interest rate.' I haven't rcvd. a reply yet, as to how they define 'current market'.  But on paper, there is a agreeable cash flow, double the duplex.  Why isn't there a long line of interested buyers?

Kathy H., Newbie

[Bob Hines]

The reason people aren't lined up to buy these is because you're a California investor and thus much smarter than the local St. Louis investors.  You have special insight that the local rubes just don't have.  Especially if you're looking for 1% deals in St. Louis.