I know many people here have experience doing their own investments, so I was hoping to get some info. How much leverage would you use for say, the buying and converting of a property into 3-6 units. I'm thinking student housing, or something around those lines. I live in the midatlantic and both cities I'm near have tons of schools. Could possibly also have access to 100k-ish in equity. Also, is this something you take to a community bank, or a cre mortgage broker? Please feel free to point out any obvious things I may naively be missing here or other things to consider. Much appreciated.
Trending Content - Real Estate Forum
| +45 | Is anybody just going to leave the industry? | 20 | 55m |
| +24 | Multifamily firms collpasing in Dallas whose next? | 7 | 46m |
| +12 | Launching a Development Platform in Greece | 2 | 4d |
| +12 | NYC Real Estate Job Market | 4 | 17m |
| +10 | Q3/Q4 CRE Job Market Optimism (or lack thereof) | 3 | 1d |
| +10 | Exits from REPE | 5 | 27m |
| +8 | Hard Money Lenders? | 1 | 5d |
| +1 | Thoughts About Starting CRE Broker Journey at Horvath & Tremblay or CBRE? | 3 | 2d |
| LIHTC Exits???? | 2 | 3d | |
| 0 | Best AI Underwriting Software? | 1 | 3d |
Career Resources
No real rule of thumb... get whatever amount of leverage that gives you the best return on your money and least personal investment risk.
3-6 units is pretty small for a commercial loan, but I believe a broker/local bank should be your best bets.
By student housing you mean buying mutlifamily to rent to students? I would avoid as your first investment. Can buy a property for a cheaper yield and rent to families who won't destroy your property.
I'm not answering your questions but get the parents to guarantee the lease and get a decent security deposit. Just my 2 cents.
+1 to comments above renting to students. I would get the maximum loan possible (highest LTV) without recourse, which means the lender can come after other assets you or your co-investors may have. If you have, say $100K, you could get up to $250K of financing with a good rate - just make sure to back out a good chunk for renovations and reserves, plus 10-20% contingency
This is a bank deal. A broker would just take it to a bank. Leverage probably depends, but I just talked to a lady yesterday who is buying duplexes and triplexes and she claims to be able to get 75% from a variety of banks.
In response to Gene above, I would think it'd be really hard to get non-recourse, but what do I know ...
Enim alias recusandae in autem enim non. Optio eum ipsum quod sed. Qui illum quo dolores laborum. Et neque provident est nemo necessitatibus.
See All Comments - 100% Free
WSO depends on everyone being able to pitch in when they know something. Unlock with your email and get bonus: 6 financial modeling lessons free ($199 value)
or Unlock with your social account...