All Forum Posts by: Brock Freeman

Having owned a 4-plex, your next move to a 5+ unit MF is the logical next step. That being said, a lot changes for you, especially around lending. Talk with a quality commercial loan broker (DM me if you need some options), there are plenty here on BP, and get an understanding of both bridge/hard money and long term financing options for 5+ units. You will need a lot more $ down vs 1-4 units. But this is how you scale up. Next, consider bringing in friends and family to help you buy; this is not a long shot since you have some experience with a 4-plex. Plenty of people out there want a piece of real estate investment but don't have the time or experience to be an active investor.

You can look at https://www.cretelligent.com/ for the environmental. 

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Need a bridge/hard money loan for your cannabis related property?

Ask your favorite loan broker about Kirkland Capital Group's private portfolio micro-balance CRE bridge loan program.

• Loan Amounts up to $1 million and 80% LTV — purchase and cash-out
• 1 to 12 months interest only, extensions available
• Multifamily 5+ units, Mixed-Use, Industrial, Office, Retail
• Cannabis related OK; motel conversions OK
• Seller contributions OK
• Rapid closing, BPO only on most deals

Ready to move on from 1-4 unit properties and move up to 5+ units multifamily? 

Yes, you can

Ask your favorite loan broker about Kirkland Capital Group's private portfolio micro-balance CRE bridge loan program.

• Loan Amounts up to $1 million and 75% LTV — purchase and cash-out
• 1 to 12 months interest only, extensions available
• Multifamily 5+ units, Mixed-Use, Industrial, Office, Retail
• Cannabis related OK; motel conversions OK
• Seller contributions OK
• Rapid closing, BPO only on most deals

You will find that many traditional lenders for commercial property have very tight guidelines. Working with a quality, knowledgeable commercial loan broker could be very helpful for you.

How is this a commercial property? Generally duplexes are still considered as residential even if their rentals.

Some may require only a new checking account and the amount you deposit doesn't need to always be a lot; depends on the CU. 

Re doing only a rate/term refi and not c/o: if you can refi local, a lot of CU's do not have prepays, so that may be a good way to go to lower your rate. However, don't make the mistake of only looking at rate. Do an actual cost calculation of what keeping the loan for another 9-12 months will cost and then a c/o refi with the adjusted capital basis and what that does for your ROI, versus a refi now and then again in a year or two (don't forget closing costs) and what that will do for your ROI.

Not surprising that any lender is going to be very wary of any bump in value right now, even one driven by a rehab and forced appreciation. 

Did you try some local credit unions?

In a word: ABSOLUTELY! 

All of our borrowers for our commercial bridge loan product are essentially doing BRRRR. The difference for most of them is that there is no need to empty the building, especially for multifamily; that means there is at least some income coming in the whole time.

However, the LTV/LTC available for CRE loans is going to be less than with most residential hard money loans. Right now the max is around 75%, although before the pandemic you could find 80%.

The positive over SFR however, is a more predictable forced appreciation value post renovation, and ability to get an exit loan that gives you long-term financing and reimburses you for renovation costs, and perhaps part of your original down payment.