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May 25, 2009
Financing a 5 family purchase?
I am far from an expert on loans and I'm interested in purchasing a 5 family house to live in and then receive income from the rentals on. Can anyone explain to me the difference between a 4 and 5 family in terms of financing? Does a 5 family mean FHA is not a possibilty? Also, am I free to get free market rent on the 4 rental units in a 5 family if it is delivered vacant? Thanks for your help!
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A 5 unit building is considered a "commercial" property in terms of financing. The general metric is 9x the rent roll minus expenses....
... meaning, if you bring in $100,000 a year in rent, less expenses, you can get roughly $900,000 in financing.
And if I'm not mistaken a 5 unit building, especially delivered vacant, will have no rent regulations attached to it.
Call a mortgage broker to get the specifics, but like I said, in general 5+ units is commercial with a 9x rent roll metric for financing.
Posted by: christopher at May 26, 2009 9:22 AM
Do not assume a vacant building does not fall under rent stabilization.
Posted by: mopar at May 26, 2009 6:55 PM
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