All Forum Posts by: Darryl Dahlen

Wells Fargo small balance commercial.

Agreed. You are talking to the wrong people which is often the problem with working with banks. You are at the mercy of their experience and product knowledge. You need to speak to someone in the commercial loan department at several banks to try and get a competitive offer(s).

A loan that small is going to be best suited for local banks or even credit unions. That being said, you may want to check with Wells Fargo as they have a good small balance program with up to a 25 year amortization.

Lenders frown on using borrowed funds to close a loan so unless you can obtain a line large enough to buy a property outright it may not help you in the end. If you use a line in combination with your own funds the lender is going to factor in your payment either as part of the debt loan or against your personal DTI.

You would likely need to have the property rezoned from residential to commercial since an 8 unit is considered a commercial property. Not an easy task and really not worth the trouble IMO.

If the numbers work I'd imagine you'll have no issues finding options, but if feel you're getting low balled on the rate/term/amortization I'd suggest you reach out to Wells Fargo. They have a tremendous small balance program up to $750,000 with great options for the term and amortization.

+1 on what Mike Dymski said. Since you will most certainly be obtaining a full-recourse loan your guarantee must mean something to the lender otherwise it's a mute point to have you as a guarantor. As such, your credit, income, and assets need to be sufficient enough to give the lender comfort that you can carry the property if need be.

This means your tax returns, bank statements, and credit need to be strong as does your post closing liquidity/net worth.

For now, you will need professional property management to handle the ongoing care of the property so using a reputable PM is key.

I'm still wondering how they think that you could get a commercial loan on a residential property?

Why the commercial financing requirement on a 3 unit? Unless there's something unique about the property or zoning this is a residential property and would obtain a residential loan.

The small loan amount is going to make this tough, but as Alexander suggested, look at the local banks.