Posted by Marc on September 06, 2005 at 24:03:23:
Thanks for your advice. I agree with you and Craig about the practicality of investing in 4-units. This has been my game plan to date, and I currently own one 4-unit and 2 SF that have been very successful. And for the most part I have been looking at 3~4 units and rehab projects.
But this 5-unit I am looking at is a special place. It is a grand old mansion in a NE mill town that used to belong to a mill owner. I don’t expect it will be a great investment. But it might be a great house for me. The apartments would simply defray my own costs of owning a grand old home. I would not expect to make a lot of money on it; it is more a quality of life issue. My day job would probably qualify me for an overpriced MacMansion SF in the suburbs, if that is what I wanted. But I would rather fix up a grand old home in my nearby low-income city , and have something I can be proud of. My specialty is renovations, kitchens, custom cabinets, etc. I would have a great time restoring at least the owner’s unit; and I would also improve the existing rentals. If I can get a decent interest rate I could do it and come out ahead in a few years. This is the purpose of my questions.
Do I really have no option other than to go with a commerical loan at 8.5%+ In theory i could afford it as a SF – so it seems funny that adding some rental units increases my borrowing costs, when in reality it should lower them. Do some local banks deal with these more individual cases?