Multifamily Rehab Funding Options

Multifamily Rehab Funding

Though most real estate investors who utilize fix and flip or BRRR real estate investment strategies for 1 - 4 unit residential properties, rehab funding is also available for fix and flip or value add for multifamily projects for 5 to 200 units. If you are looking to build your rental portfolio and are considering larger multifamily units, there are great funding options available. These options include up to 100% of the purchase price and 100% of the renovation costs. But first let us look at the benefits of investing in multifamily residential properties.

Benefits of Investing in Multifamily Property

1. More Profit: When compared to single family rental and small 2 to 4 unit properties you can potentially have much greater profit as compared to cash invested. 
2. Lower Costs: When you invest in properties with more units, the cost of acquisition and maintenance per unit is lower. This also means more profit.
3. Lower Risk: The financial risks are lower the more units you have. If you have one unit and one tenant moves out you are 100% vacant. If you have 10 units and one tenant moves out your are 90% occupied and still profitable. As a matter of fact when you analyze the viability of larger multifamily properties with more units you should consider vacancy factors in determining profitability.
4. Less Work: When purchasing multifamily properties with more units it is more feasible to hire property management. Professional property management makes owning real estate a passive investment because the time you spend managing your business has been greatly reduced.
5. Faster Growth: As a real estate investor looking for financial freedom through short term fix and flip or long term portfolio or a combination with the BRRR method investing in multifamily properties with more units will help you meet your goals sooner. Whether your goals are based on number of units owned, net monthly income or some other metric, you will get there sooner buying apartment buildings with more units.

Multifamily Rehab Funding Programs

There are multiple program options available but all options are not available in all states. Options include but not limited to:

1. Full Doc 100% Purchase and Rehab: up to 20 units with no down payment and 100% of renovation costs up to 65% of the after rehab value. Loan amounts from $200,000 to $1,000,000.
2. Lite Doc 75% Purchase and 100% Rehab: 25% - 30% down payment of the purchase price with 100% of renovation costs, up to 70% of after rehab value. Minimum as is value of $50,000 per door. Loan Amounts $250,000 to $5,000,000
3. Heavy Rehab 75% Purchase and 100% Rehab: 25% down payment with 100% of rehab up to 75% After Rehab Value. Low and no occupancy ok with loan amounts from $500,000 to $10,000,000.

All programs have interest only payments with no prepayment penalty to allow you to sell or refinance for low interest rate long term financing without penalty. Each program als allows mixed use properties as long as residential portion is greater than 50% of square footage. 

Whether a real estate investor is looking for the best terms or the lowest down payment there are options for multifamily apartment investors to build their portfolios even with limited experience.