Anyone have lender options for 20% down financing : 5 units /residential.
I'm an investor looking for a lender for 20% down.
5 units multi family.  Excellent condition, 6% cap.
[{"id": "fuvls1e", "text": "Fyi 5 units is commercial and you will need to meet the debt coverage ratio which usually is around 1.2. Depending on price you might need more than 20 percent down.", "replies": [], "depth": 1}, {"id": "fuvn4x6", "text": "Yes I do. Max 25 year amortization. Needs to cash flow itself at 1.25 to 1 or more down will be required. Pm me if interested and we can run through the numbers", "replies": [], "depth": 1}, {"id": "fuw8h91", "text": "Freddie Mac SBL program can go up to 80% depending on location", "replies": [{"id": "fv5teio", "text": "Minimum loan size is $1 million. Unlikely he'll get there on 5 units.", "replies": [{"id": "fv63lwk", "text": "Depends on location", "replies": [{"id": "fv67yq1", "text": "Their Small Balance Loan program guideline is $1MM to $7.5MM.\n\nWhat location would you say they offer under $1MM consistently and not as an exception as part of a play for multiple deals/relationship accommodation?", "replies": [{"id": "fv6851r", "text": "I meant on valuation, can get to 1 million at 80% LTV on 5 units dependent on location", "replies": [{"id": "fv69ocv", "text": "Agreed. Once the rent per unit starts going above $1,750/month, that 5-unit might work assuming a 3.5% rate.", "replies": [], "depth": 6}], "depth": 5}], "depth": 4}], "depth": 3}], "depth": 2}], "depth": 1}, {"id": "fuwbjf2", "text": "Where is the property located?\n\nIf it is in a low cap rate market, the minimum debt service coverage requirement of 1.20-1.25x will likely limit your loan amount. The 6% cap rate suggests you should be OK, but I'd need to see the numbers to be sure.\n\nGenerally typical senior debt commercial mortgage programs limit LTV to 75-80% and DSCR must be at least 1.20x.\n\nThe other thing you have to worry about is minimum loan amount. I suspect your loan amount will be less than the $1 million minimum for Freddie's Small Balance Program and the $750k minimum for Fannie's program. In this case, you will need to look at local banks and credit unions.\n\nHit me up if you want to discuss further.", "replies": [{"id": "fv57c2z", "text": "So I divide my NOI ($59,000) by my debt right?", "replies": [{"id": "fv5t9bu", "text": "NOI over debt/loan amount gives you the **debt yield**, which is a useful metric.\n\nNOI over debt service gives you the **Debt Service Coverage Ratio**.\n\nLinking these concepts, if you take the lender's sizing parameters (interest rate for sizing, amortization for sizing, and minimum debt coverage), you can calculate their minimum debt yield, which will allow you to calculate the maximum loan amount for a given NOI.\n\nSpecifically, let's say your lender will size/underwrite the loan using a 4.00% rate with a 30-year amortization. You know their minimum DSCR is 1.20x. Your property has an NOI of $150,000. How do we calculate their minimum debt yield and the maximum loan they'd consider per the minimum debt coverage constraint?\n\n1. Calculate the annual constant. (In Excel: =pmt(4%/12,30x12,-1)x12 = 5.729%)\n2. Multiply the constant by the minimum debt coverage ratio (5.729% x 1.20 =  6.875%). This is the minimum debt yield.\n3. Divide your project's stabilized/recurring NOI by the minimum debt yield to find your maximum loan amount per the DSCR constraint. ($150,000/6.875% = $2,181,888)\n\nI hope that helps.", "replies": [], "depth": 3}], "depth": 2}], "depth": 1}, {"id": "fuwsg0f", "text": "Yep.\n\nCommercial.\n\n 20%/25yr/4.3%\n\n(not sure what your location, but 6% multi-fam is pretty weak IMO.)", "replies": [{"id": "fuwytzv", "text": "This might be a dumb question, but I've got 21 sfr's that I bought and own outright, majority of which are rented and just now talking to a local bank for the first time about trying to buy two more via a loan. This is new territory for me, but they offered a 5 yr balloon at 5.5% interest 15 yr amortization and 20% down.  I'm tempted to tell them no thanks, is this a common investment property loan?", "replies": [{"id": "fuxlhey", "text": "Not OP you asked but I\u2019m a commercial lender. This is fairly typical. Not really sure why you aren\u2019t getting a longer amortization tho, will cut your cash flow down pretty significantly. The 5 year term (\u201cballoon\u201d) is normal. 20% down is normal. The rate is terrible, on a 5/15 today with prepayment penalty I\u2019m at 3.00%", "replies": [], "depth": 3}, {"id": "fuxp4cg", "text": "I can do 75% maybe 80% cashout no seasoning, LLC ok, no credit score ok, in the 5's, and 1.1 DSCR on blankets based on expected rents not actual. 5 7 or 10 year fixed.  What state?  PM for an application.", "replies": [{"id": "fuxsoyp", "text": "NC.", "replies": [{"id": "fuxt5fg", "text": "PM me your email and I'll send the submission link and instructions.", "replies": [], "depth": 5}], "depth": 4}, {"id": "fv576vj", "text": "Thanks.", "replies": [], "depth": 4}], "depth": 3}, {"id": "fuxy2df", "text": "i'd shop around, that loan offer isn't appealing at all lol. Talk to a 'big bank', 'Regional Bank' , and a 'Credit Union'.", "replies": [], "depth": 3}], "depth": 2}, {"id": "fv574vo", "text": "Everywhere is different I guess.\nForna property this clean the cap should probably be lower IMO.", "replies": [], "depth": 2}], "depth": 1}, {"id": "fux1xal", "text": "What\u2019s the loan size? I have a group that goes down to $650k and will do non-recourse at that size.", "replies": [{"id": "fv2vrs8", "text": "Loan would be between 750k and 775k", "replies": [{"id": "fv440vw", "text": "Do you prefer email or phone? I can private message you my contact info.", "replies": [{"id": "fv56x5i", "text": "Pm Me sure thank you", "replies": [], "depth": 4}], "depth": 3}], "depth": 2}], "depth": 1}]