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All Forum Posts by: Gabe Callaway

Gabe Callaway has started 1 posts and replied 4 times.

Quote from @Joshua Christensen:

Hey Gabe, I'm not a lender, just a broker and investor with my own experiences.  

Typically, what I've seen is 1-4 is considered a residential loan and falls under Fannie Freddie guidelines. There are residential DSCR lenders out there who will write these loans. The comments above are great examples.

2-20 units+ comes down to a lot of different options. They are all going to be "DSCR" loans as the lenders consider the income the asset produces in their underwriting, not the guarantor's income. We're currently working on a 69 unit deal that we're going with a Community Bank on. 25 year paper with a 1 year I/O period for stabilization timeframe.

There are no cookie cutter or "traditional" ways these are done.  There are a lot of different paths.

Community Banks

Credit Unions

Commercial Brokers

Private (Hard) Lenders

LifeCo (typically found through a broker)

Owner/Seller Finance (my personal favorite as terms are worked out between buyer / seller)

FHA 

Fannie/Freddi Small Balance (typically under $10MM)

Large Balace ($10MM+)

Preferred Equity

Bridge / Mezzinine debt

SWAPS

Assumptions

Land Lease Buyouts 

The best thing I can recommend is finding a good lending broker that deals in these.  Most will be more than happy to walk you through the details.  The size of the deal is usually what determines the type of debt structure it falls into.


 This is exactly what I was looking for. All of the other information is all really great but I'm ready to graduate to larger deals and this is very help. Thank you, sir.

Quote from @Matthew Kwan:

You can either go towards DSCR where it does not require to use your income to qualify, where it only looks at the performance based of the rental property in a metrics of ratio. Or bank statements loan where lenders would only use 12 months deposits from your bank statements an average it out to calculate the income. Both of these programs can help qualify and obtain a loan for investment properties, but the tradeoff is that these programs have slightly higher rates than conventional loans.

If you are looking for lower rates which everyone tries to, you can always consider the traditional route of conventional loan where rates are typically lower 1-1.5% but you would want to make sure if your income/credit/assets can qualify for it.

@Carlos Valencia @Albert Bui


 Thanks Matthew! Do you have specific metrics for each type of loan that are important? Or a good resource for learning more about these types of loans?

Thank you for your kind reply. So because I am at a 3rd grade level with this stuff, a rate adder would increase the rate as the property grows in # of doors? 

How are Multifamily properties traditionally financed if there ever were such a thing? Or is every deal too different to compare the financing?

Hello,

Long time listener, first time caller. (Love a good radio throwback)

I am curious what/how most people are financing multifamily deals? What is the "traditional" way of financing them? Are DSCR loans looked down upon? I have many properties with 1-4 units but am looking at mid size properties and wondering what path to walk down for funding these.

Thank you!