All Forum Posts by: Demetrius Davis

I have what was presented to me as a 4-unit under contract in Chicago. The appraiser commented that it is a “legal 4-unit building” on the appraisal. The Cook County Assessor lists it as a 4-unit as well. The seller requested a zoning certificate from the city and it came back as a 3-unit. I should add that the seller’s attorney screwed up the application for zoning certificate by listing it as having 2 units on each floor, rather than 1 unit on each floor including the basement.

During the inspection we discovered that the basement apartment, which is occupied by the owner’s son doesn’t have its own gas meter or furnace. It shares a meter and furnace with the 1st floor apartment, but has its own vents.

What do I make of the discrepancy between these various entities including the appraiser? Has anyone dealt with something similar? Any advice on how to proceed?

@John Warren thanks a lot for clarifying things! Also, thanks for your points about what it takes to qualify for these loans.

@Erik Estrada here’s a link to a site that explains it: https://www.commercialrealesta...

@Erik Estrada Freddie and Fannie offer commercial loans with low interest rates on commercial multifamily properties. The loans are assumable by the new owner and typically have 10-year terms. They qualify the buyer and also charge a 1% fee.

 @Erik Estrada it’s a 19-unit building. I apologize that I didn’t clarify that I was referring to commercial lending.

@Andrew Postell does this apply to commercial loans by Fannie and Freddie? The subject property is a 19-unit building.

I’m considering a multi-family building in the Chicago area that has a Fannie/Freddie type loan in place at a very low interest rate. After assuming the loan, there is still another $600k that I would need in order to come respectfully close to the asking price. I don’t have access to that amount in cash, but could pull together $250k +/- personally and through money partners. What are my options for satisfying the remaining $350k? Are there lenders who will take second position liens on these kinds of deals? What are my other options besides seller financing to put together the capital stack?

 @Wale Lawal thanks a lot for posting this article! This is gold!

@Scott Steinlauf that’s very sound advice! It’s all about discipline and the numbers. From time to time I get super excited about a property, then surprisingly after running it through my spreadsheet, I realize that the return is horrible.

 @Crystal Smith, great advice! Thank you!