If you have a need for multifamily property financing you will want to follow some tips that will help you get the best possible deals. These tips make it easier to navigate the process of financing.
Often, short-term rehab projects are best funded using bridge loans. This is a type commonly extended by banks and individual lenders. If you can complete the project quickly, you won’t have to pay as much interest. With the right lender, you can make prepayments on the loan, saving you money in higher interest and fees.
Occupy The Property
When you occupy the property you need a loan for, it’s possible to obtain an owner-occupant mortgage. Compared to a typical mortgage, you’ll have a lower interest rate to play, and a smaller down payment than usual. In comparison, if you are the landlord of your multifamily property but not a resident of it, the down deposit is 20% of the property’s total cost. It is possible you may be able to get a Federal Housing Administration loan.
Syndicate Real Estate Transactions
Teaming up with other investors to purchase a multifamily property is known as real estate syndication. In many cases, this can be a great way to avoid having to make a down payment. This allows you to invest in properties you wouldn’t have been able to otherwise.
Use An Equity Share Investor
An equity share investor can help you get the financing you need to purchase a property. They will give you money to buy it with, and in exchange, you give them some equity in the property you are acquiring. This means that he or she will receive money every month, based on the property’s monthly income. In the event that you sell it, the equity share investor gets part of the proceeds. With the right property to offer part of, finding an equity share investor can be easy.
Secure Financing Based On Future Rent
If you need to in order to get a loan, you can use the rental income the property will make in the future, to finance it. To secure financing this way, you will need to present signed leases from your tenants.
For more information on multifamily property financing, please contact Lionheart Commercial Capital.