Conventional Investor Loans Vs. Commercial Rental Loans

[Louis Jeffries]

As a Commercial Lender, I have a lot of Real Estate Investors contact me to finance the purchase or refinance of their residential 1 to 4 unit investment property. Often they are looking for conventional terms with commercial rental loan characteristics. Let me say this quick fast and in a hurry. Always get a conventional loan if you qualify for it. The rate is lower and the fees are lower. That said there are times where it would be better (or you have no choice) to choose a Commercial Rental Loan. Here are a few and there may be more, please chime in.

1. You do not qualify for conventional financing due to credit score, personal income, assets for reserves, ownership seasoning, or having too many rental properties financed.

2. You want the loan and property in your business name.

3. You do not want to share your tax returns.

4.  You want maximum cash out quickly.

These are but a few reasons to refinance your 1 to 4 unit investment property as a commercial rental loan Vs a conventional Fannie or Freddie loan. But again rate and fees are lower on conventional loans!

Please let me know your thoughts