Interest-only payments for up to the full term on an apartment building. Because the loan qualifies on the interest-only payment, the same building can often support a larger loan, and that usually means more cash out at closing.
On an amortizing loan, part of every payment goes to principal, and the loan has to qualify on that larger payment. On an interest-only loan, the payment is interest alone, and that smaller payment is the one the loan qualifies on. With the same rents and the same expenses, the difference can be hundreds of thousands of dollars in loan amount.
Owners come to this loan for three reasons: to take more cash out of a building that has gone up in value, to pay off a bridge loan and come away with cash rather than bringing it, or to keep as much of the rent as possible every month while they hold.
On 5 to 300 unit apartment and multifamily properties, loan amounts typically range from $500,000 to $20 million. Maximum LTV is typically 75% on refinances and purchases.
These are typical ranges, not a quote. Your rate and loan amount depend on the property, your credit, and the market.
The units are leased, but the last twelve months still show the lease-up.
Stable and cash flowing, just short of what most bank and agency loans want to see.
Florida, the Gulf Coast, and other markets where insurance takes a bigger bite out of the income.
Strong buildings outside the largest metros that need more leverage to work.
Garden and mid-rise properties well past 100 units.
Owners who have put more into a building than today's value reflects.
The interest-only payment can often support a larger loan on the same income, and more of your equity comes back at closing.
Replace it with a longer loan that pays it off, and in many cases puts cash back in your hands.
With no principal in the payment, more of the rent stays with you every month.
Shorter terms keep the payment low now and the exit open later.
Refinance, cash out, or a bridge payoff. Send the numbers, and we'll come back with a quote.
