use residential loan for commercial property??

Financing, Hard Money Lenders, Private Money
1

Hello All,

If a commercial property (over 6 residential units) has a very low price (REO purchase), can it be purchased under a residential mortgage?

I’ve heard that commercial lenders will not touch loans that are under a certain amount.

Please advise.

2

Deal,

Conventional financing is capped at 1-4 units. Try a local bank for your commercial financing needs. They are much more flexible on their loan amounts than national commercail lenders like Metwest.

3

It depends upon the loan source, generally, banks are seen more flexible in this regard.

4

A residential property is a residential property regardless of the number of units. A 100-unit apartment complex is still a residential rental property. This distinction is important when you are depreciating the property. Residential rental property is depreciated over 27.5 years versus the 39 year depreciation schedule for commercial property.

Any residential rental property can be financed with a commercial loan. Only residential properties with 4 or fewer units can be financed with a residential mortgage loan.

5

Local bank, hard money or ideally private money.

6

Any residential rental property can be financed with a commercial loan. Only residential properties with 4 or fewer units can be financed with a residential mortgage loan.