Financing Multi-Family Properties - Posted by anthony

Posted by John Corey on May 13, 2006 at 09:00:41:

  1. Both the commercial forum and the financing forum would be better suited for this question.

  2. As Ray Alcorn will tell you, when dealing with commercial deals assume you have to have cash in the deal. 100% financing is rather rare. Most commercial investors are not just starting out and have assets and cash to work with.

  3. Commercial lenders rarely allow 100% financing. Hence you will have some issues with a lender in 1st if you are not putting anything in. What you put in can come from a partner so it does not have to be your money. Just that they want to see some cash.

  4. Yes, nothing down deals do exist in the commercial segemnt. Seller carry back is also more common than with residential deals.

So, be aware that you might be using the wrong strategy if you want to invest in the commercial space. The NOI is critical but cash likely needs to pass across the table in same fashion.

John Corey

Financing Multi-Family Properties - Posted by anthony

Posted by anthony on May 13, 2006 at 04:46:07:

How would you set up a plan to purchase multi-family properties using private investors (not hard money??

For example, I find a 18-unit multifamily property for 800k.

It cash flows well meeting all forcasted expenses. Through research I can finance only 80% to
90% LTV of the cost… leaving me a 10-20% downpayment

  • closing costs.

How would you create a plan to “borrow” the downpayment + closing costs to do these deals.

I’m thinking of offering 12% simple interest to a Private Investor for the defined period to repay those costs.

I feel like I’m re-creating the wheel. Can someone really simplify this mstery for me. THANKS!!