I will be purchasing a 5 or 8-unit rental building here in Central PA under my recently formed LLC and am looking for a lender to finance that. Building is $300K (5 unit) or $350K (8 unit) and LLC will put 20% down. Will not be occupying a unit, so no chance of getting 'residential' loan. Would like to see what's available out there before I go talk to the local bank, where I suspect I won't get the most competitive thing going...

Thanks,

GFY

The terms you can get will really depend on where in Central PA. The loan amounts on both properties are fairly small for commercial deals so CMBS lending would be not be possible.

These small deals are alomost always done by local banks. Assuming you and the properties qualify, you should see 6.75%, 5 yr fixed 20 yr amortization with 20% down.

If the loan amount were sufficient ($300,000+, and the properties where in an acceptable area, you could get as low as 6.25%, 10 yr fixed 25-30 yr amortization. Acceptable areas would be places like Johnstown, Altoona, State College and Harrisburg.

Thanks Commercial LO... I appreciate the feedback.

The "local bank" terms you mentioned are identical to what I was told by the one local banker (a friend) I spoke to.

The properties are in Shippensburg near Shippensburg University - primarily student renters. Not sure if that's an 'acceptable' area of no.

And of course, given the purchase price, the only way I can nudge the mtg. amount over $300 K would be a sub-20% down, which is probably not gonna make anyone happy... It's not even a matter of stepping up to a slightly higher priced building with $300K financed and 20% down ($375K price). Ain't nothing on the market around here at that price level or higher...

GFYHoldings,

Based on current market conditions, you can most likely attain a 6.0% loan at 80%LTV. Plus, a private loan can be issued for the other 20% if so desired. A 25 year amortization is most common, but 30 year amortization is attainable.

I am a commercial loan officer and can offer you the above terms.

Please feel free to contact me:


I have a couple questions:
What condition is the property in?
How many units are currently occupied?
Do you have access to the rent roll on the property?

I look forward to hearing more about the property, plus I am curious what the local banks up there are doing.