Hi William - just wanted to share an article I wrote about DSCR Multifamily Loan Options and Pros and Cons for this exact need (5-10 unit multifamily). 

Most commercial loans are based on income. 

We provide the address in these specific situations.

My prospective tenant’s last three housing situation.  1.

We are a few friends with special needs kids, who want to book and buy houses adjacent to each other. Obviously new construction since that's the only way you can choose adjacent houses.We want to form a social connec...

So I started trying to get creative on how to create a win-win-win for all.Here’s how it went down:I got the sellers to agree to an asking price of $180k, a full $40k over what they originally wanted.In the offer, we included a seller credit of $34k.This strategy allowed me to cover the extra commission for both the buying and selling agents and ensure the seller got exactly the cash they wanted should they have sold it at 140k.With the seller credit, this reduced my total out-of-pocket expense to just $6k.I used a commercial DSCR loan product with a local bank.

You may want to explore cashing out, and structuring a reasonable loan term with your current strategy in mind.

And, to make things even worse, after I deduct all the expenses, costs to hold property, repay the loan with huge interest rates, I would end up with little or (possibly) no profit at all.

Hey BiggerPockets, I’m here for any advice that you can give me on my current situation.

Are there other types of loans people use to pull equity from their rental to purchase additional properties?