Answers (7)
- zandall
- Contributions:24
Nathan
I might consider converting them to condos at a later point, but not in this market. I have no interest in changing this building to anything but a six family. Thanks for all the ideas and options you presented though. There are numerous possibilites with the property which is why I want to buy it.
If I go with a commercial loan can the rental income be credited as income?
I might consider converting them to condos at a later point, but not in this market. I have no interest in changing this building to anything but a six family. Thanks for all the ideas and options you presented though. There are numerous possibilites with the property which is why I want to buy it.
If I go with a commercial loan can the rental income be credited as income?
- Nathan Wolf, "natewolf"
- Contributions:1832
If you own your other investment property (own, as in, no mortgage/financing), you could seek a general business loan or portfolio loan and get financing on both properties as a group.
Ultimately it depends on your credit situation, and the amount of verifiable income the properties produce. It also depends on what you intend to do with the 6-family property. There are special programs for low income housing if that's an option for your project. If you intend to sell the units individually, you could seek a redevelopment loan. Often there are tax benefits for these as well.
So not only the type of property, but the purpose of the loan becomes an issue. It is possible that the seller could convert the property into a four-unit building and you could qualify for a residential loan instead of a commercial loan. This usually would entail removing all or part of a kitchen. Ultimately if it were converted back into six units would not usually affect your loan. But you should speak to your lender and also to your zoning department about this option because you don't want to do anything illegal-- but this is definitely an option.
If you will not live in the property, then the rates and terms on the residential or commercial loan options may not be significantly different. Local banks and savings&loans are generally better sources for commercial loans on products like this since they know their local markets and will usually hold the note themselves on something like this.
Why check with zoning if you're planning to convert/reconvert the number of units? Because some buildings which currently are grandfathered as multifamily would not be allowed to rebuild under current restrictions.
- David Nezri, "Direct Lender"
- Contributions:265
If you go over 4 units it's considered commercial. Most lenders will give you an adjustable rate 3/5/7 paying points.
- shapiroamg
- Contributions:3136
Commecial rates can vary greatly from lender to lender and from the local banks. Fixed rates are probably harder to find. Most rates are adjustables for 3, 5, or 7 years. Start with your local banks as they might be the source for rate/product information.
- zandall
- Contributions:24
So there are no other options other than commercial? What sort of terms are associated with commercial loans?
- Eric Smith, "ohiosmitty"
- Contributions:352
Buildings over 4 families (5+ units) is considered commercial. You will need to find a commercial lender for this.
Expect the terms and the lending process to be even tighter than residential. Probably good to see your local savings and loan.
Expect the terms and the lending process to be even tighter than residential. Probably good to see your local savings and loan.
Looking to buy a 6 family
Thanks
Stating a discriminatory preference in an advertisement for housing is illegal. If you think this content is discriminatory or otherwise inappropriate and feel it should be removed from Zillow, please let us know by completing the information above.
We will review this content. Thanks for helping make the site more useful to everyone. To learn more, read Zillow's Good Neighbor Policy.