Small Commercial Expert: Multifamily Financing

Multifamily Financing

Multifamily Financing - Plain & Simple

The latest in small balance loans for real estate investors is multifamily financing for loans from $1 million to $5 million.  New apartment loan products on the market today provide for small balance loan refinancing that provides some of the lowest rates in years.

Multifamily financing with rates starting as low as 2.875% is no longer a fantacy but is a reality.  The problem in the market however, seems to be that most commercial real estate investors who have small balance loans are stuck in CBMS prepayment penalty nightmare.

Multifamily Financing with Prepayment Penalty

Today rates are so low that refinancing an apartment loan or multifamily financing and paying off the prepayment penalty still makes since.  The increase in cash flow from a much lower payment plust the fact that large portions of principal are still being paid down with each payment because of the extremely low rates makes refinancing and paying the prepayment penalty a no-brainer.

Multifamily Financing with Prepayment Refinancing Example:

Original Loan - $3.5 million at 6% with a 15  year amortization

Current Loan Payment = $29,388/month

Loan Balance - $3.0 million

A refinance of this loan would look like this:

New Loan - $3.0 million at 3.75% with a 25 year amortization

New Loan Payment = $15,375/month

That is a savings of $14,012/month or $168,000/year.  Even with a 5% prepay, it would make since to refinance and pay the prepayment penatly because with a fixed term of 5 years the borrower in a situation like this would be spending $150,000 to create an increase in cash flow of $840,000.  Subtract the $150,000 prepay and the net gain in positive cash flow from this multifamily financing refinance strategy is $690,000!

Multifamily Financing - Conclusions

The conclusion here is plain and simple... refinancing your multifamily financing and apartment loans in today's low interest rate environment means netting MORE from your current portfolio of apartment buildings and multfimaly assets.  Don't hesitate or these low rates will be gone!

For more information on how multifamily financing strategies can help increase cash flows and acquire more doors give the multifamily financing and apartment loan experts at Dividend America Commercial Lending a call today.  Call Michael Gross, President, at 404-549-6756 or email mgross@dividendamerica.com

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Lending in all 50 states and focusing on Multifamily Financing and Apartment Loans in the markets and submarkets listed in the S&P Case Shiller Home Price Index and the surrounding secondary markets to those cities.  We look for opportunities in:  Boston, Chicago, Denver, Las Vegas, Los Angeles, Miami, Fort Lauderdale, Orlando, San Diego, New York, San Francisco, Phoenix, Atlanta, Tampa Bay, Detroit, Minneapolis-Saint Paul, Charlotte, Dallas / Fort Worth, Portland, Seattle, Cleveland, Oklahoma City, Jacksonville, Indianapolis, Nashville, Kansas City, Louisville, Milwaukee, New Orleans, Philadelphia, Raleigh, Sacramento, Salt Lake City, San Antonio, San Jose, Saint Louis, Tucson, Austin, Baltimore.

Comment balloon 0 commentsMichael Gross • June 01 2015 02:47PM

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