Thanks for your advice in the past.
I have a proposal on a property that is $435000
It is a 6-unit house that is in a great location and clearly the seller is pricing it based on the market apprecation in the Downtown St. Petersburg area.
It grosses 33k nets 18k.
What are the best rates going now for commercial finance? The seller is willing to hold paper if I come up with 30%. I do not have 30% I have up to 10% down and strong credit. +720.
Do you have ideas and options for this financing

Ttaylor:

I don’t think that this particular property sounds like a good investment. You are talking about a 4.1% cap rate here. I live and work on a very hot real estate market and have not seen anything lower than 7%.

Having said that, you will find it difficult to get a loan mostly because the property’s rental income can not pay the debt service.

A loan for 90% of the purchase value {$391,500} at a rate of 6.75% {a good rate for 90% ltv} with a twenty-five year amortization requires about $33,000 of annual debt service, which is hard to do with $18,000 NOI.

I also have to say that your comment ” It is a 6-unit house…” confuses me. Is this an apartment building or is it a house? If it is a house are you allowed to rent rooms?

Good luck

10% down will work esp for clients with 700+ scores (provided that the building can carry the debt service). Do you have any operating statements for this property?

Commercial rate start in the high 6.00%'s. Rate will continue to go up this year, so if you have the option for a longer fixed, i.e 5 or 7 year, i would advise it. Some lenders (esp residential that are now trying their hand at commercial) are offering 10-15 year fixed rate mortgages but most are either balloons or the lender has restrictions such as no seller seconds.