Fast Multi-Family Loans
Venus Capital is an industry leader in Multi Family Financing. We can close with Speed, Reliability and Certainty. Multiple Options for cash flowing rental properties (5+ units) nationwide except CA, NV, Dakotas, MN
Stabilized Bridge Loan
Commercial Loans for investors buying Multi-Family Apartment Buildings (5+) ; Mixed Use (Residential Space is greater than 50% of square footage)
Purchase- Upto 80% of As-Is Value
Refinance- Upto 75% of As-Is Value
Cash Out – Upto 65% of As-Is Value
Loan Amounts – Short Term $300k to 5mn
Long Term – $500k to 5mn
Long Term Buy and Hold Stable Properties with Rent Roll (90% occupied)
Purchase – Upto 75% of As-Is Value
Refinance – Upto 75% of As-Is Value
Cash Out – Upto 70% of As-Is Value
Credit- Short Term – 620 Minimum
Credit – Long Term – 680 Minimum
Financing Properties with 5+ Units
As an experienced real estate investor, you’re probably looking for ways to grow and diversify your portfolio. One of the ways to accomplish this is through investing in multifamily properties that are five or more units. Multifamily properties offer investors the opportunity to purchase a property, rehab it if necessary and then use it as a cash-flowing rental property.
This is attractive to real estate investors because, in a market that seems to be shifting towards renting not buying, multifamily properties offer the opportunity for a strong return on investment.
As a new investor looking to get started how can you obtain financing and what is the process like to get a multifamily loan? In this article, we’ll explore the Multi Family financing options as well as the financing process for real estate investors looking to invest in multifamily properties.
1) Multi Family Financing Options for Investors
As an investor looking to get started with multifamily properties you first need to understand the financial options that are available to you. One of the best ways for you to get financing to purchase or refinance a multifamily property is through a loan from a private lending firm like Venus Capital, who can offer you faster closings and competitive rates with less red tape than a traditional bank. This is a great option for a new investor who is looking for a reliable financing partner to guide them through the process and helping them to do their first deal.
Things to look for when selecting a lender are straightforward rates and terms, no hidden cost or junk fees, and a streamlined underwriting process.
2) Application Process
Once you find the right financing partner you will need to complete an application. After applying there will be a certain criteria that you as a borrower must meet to be pre-qualified. One of the major factors toward being pre-approved for a loan is your credit score. A credit score of 680 is typically the minimum credit score required unless you are a member of a large entity in which case the minimum credit score is 630.
Other factors that a lender will look for in you as a borrower is your ability to provide at 20% of the total cost as a down payment, your experience investing in multifamily properties, and that you have created an entity to obtain the loan under.
3) Underwriting Process
After you’ve been pre-approved as a borrower for the loan, the property you wish to obtain financing for will be underwritten to ensure that it meets the requirements of the lender. One of the best indicators of a strong property is the Debt Service Coverage Ratio, which is the net operating income divided by the operating expenses. A solid DSCR for a multifamily property is 1.20 or higher.
Other factors for a property include location, whether or not the property will pass an inspection, and if the appraised value of the property makes sense to the lender. This process in total can take about 3-4 weeks to close with a refinance and 4 weeks with a purchase and rehab.
After going through the pre-approval process as a borrower and meeting the property requirements in the underwriting process, your multifamily deal will close and fund. Once you fund your deal the monthly interest payments will start and you will begin paying off the debt on your property through your cash-flow.
At the end of the term, if you wish you can refinance your property into a long-term loan such as a 30-year mortgage and continue to have it serve as a cash-flowing property.
Multifamily Financing investing is a great way for investors looking to diversify their portfolio and gain cash-flow in an increasingly strong market. By understanding the process to acquire financing for a multifamily loan, you can make the best decision for you and what fits your goals to grow your portfolio.
At Venus Capital, we offer industry-leading multifamily financing to real estate investors across the country.
Advantages of Refinancing a Multi Family Property
If you’re an experienced real estate investor looking to grow your real estate business or increase the value of your current multifamily property, what are your options?
You could sell your property, but there’s the risk of not getting the full value if you sell too early or if the property needs rehab to increase its value. If it needs value-add rehab, what can you do if you don’t have the necessary funds? Finding a solution to these problems could be solved by refinancing your current multifamily property.
If you do choose to refinance, what are the advantages of refinancing? In this post, we’ll explore three advantages of refinancing your multifamily property and how refinancing can benefit you as an investor.
1) Lower Interest Rate
One of the biggest advantages of refinancing your multifamily property is a lower interest rate. If your intention is to hold onto the property for one to two years, then refinancing out of your current loan into a loan with a new interest rate can increase your monthly cash-flow by lowering your “out-of-pocket” costs. Rates with Multifamily program can go as low as 5% based on experience, leverage, and whether or not the property needs value-add rehab or is currently stabilized.
2) Pull Out Your Equity in the Property
If you want to leverage the equity you’ve already built into your property, exploring a cash-out refinance is a good strategy. With a cash-out refinance, you can cash-out up to 65% of the property’s loan-to-value (how much it is worth as-is) if the property is currently stabilized. This is an appealing option because it allows you to pull the cash straight out of the property, which could then be used to purchase additional properties – single or multifamily – and grow your business.
3) Cash-Out Refinance for Rehab Funds
Finally, if you’re looking into refinancing your multifamily property, you also have the ability to refinance and acquire value-add rehab funds. If you already own the property, you can refinance it up to 75% of the loan-to-ARV (After Repair Value, or what the property is worth once the rehab is completed), to acquire the necessary funds to complete the rehab.
Completing the rehab increases your property’s value and allows you to hold the property for up two years, with an additional extension year available, before either selling the property or refinancing again into a long-term loan.
These three advantages can help you refinance your property and capitalize on the equity you’ve built while you’ve owned the property and can also help you complete value-add rehab on the property, which increases the overall value of the property, and in turn increases your monthly cash-flow.
Venus Capital is the nation’s premier lender for real estate investors. We make it easy to finance your fix-and-flip projects, rental properties, and multifamily investments. Our Multi Financing program offers investors both a value-add rehab and stabilized option for their multifamily properties. We can lend in 40 states including Ohio, Florida, Georgia & Maryland.