2 – 4 Unit Rental Property Loans

 

2 - 4 Unit Rental Property Loans

Duplex, Tri-Plex, and Quad-Plex Rental Property Hard Money Loans

One of the best rental property investment opportunities for those who want to mix the Pros & Cons of single families & apartment buildings will require some type of 2 - 4 Unit Rental Property Loans. Small multi-family real estate financing is a specialty for us at Glassridge.

That's because the Duplex, Triplex, and Quadplex properties are similar enough to Single Family properties that nearly all our investors who've had success in one can succeed in the other. A 2 - 4 Unit Rental Property is still relatively small, its utilities & major systems are almost identical to any Single Family Residence (SFR), and therefore easy to work on & maintain.

They also have some unique regulatory features discussed below that set 2 - 4 unit properties in a class all their own.

Glassridge 2 - 4 Unit Rental Property Loans

The 2 - 4 Unit Rental Property Hard Money Loan rates & terms listed below are subject to change, and will not apply universally. These are just rough ballpark rates & an outline of the typical terms.

Eligible Property Types:Single Family Residences (SFRs), 2 - 4 Unit Multiplexes
Eligible Uses:Acquisition, Refinance, and/or Renovations.
Loan Term:2 - 30+ years.
Min. Loan Balance:$70k - $100k, (click here for low balance (<$70k) hard money loans).
Max LTV (Purchase Price):65% - 80%, with up to 90%+ for highly qualified repeat Borrowers.
Max LTV (Rehab Costs):90% - 100%
Interest Rate:6.75% - 10%
Rate Type:Fixed and Variable Rates Available.
Origination Fee:2% - 4%
Processing Costs:$395 - $695

About Glassridge 2 - 4 Unit Rental Property Loans

2 - 4 Unit, Long-Term Buy & Hold Rental Property Loans are an often overlooked Hard Money option.

While on the surface a typical duplex, triplex, or fourplex is very similar to a slightly larger Single Family Residence, divided up with separate utilities & units, they stand out for other important reasons. Their common sense pros and cons fall basically somewhere between a single family house and a larger 5+ unit apartment building: simplicity of management (pro), but not much economy of scale (con).

However, these common sense, surface-level benefits ignore one of the most important features of 2 - 4 Unit Rental Property Financing (in the USA at least).

What Makes 2 - 4 Unit Rental Property Loans So Special?

While their practical benefits are numerous, the crucial uniqueness of 2 - 4 unit real estate properties is as a result of regulation.

Specifically:

According to the US Federal Government, 1, 2, 3, and 4 unit properties are all basically considered "Single Family."

That means you can still get a standard, FHA insured bank mortgage on up to a 4-unit multi-plex.

FHA insured mortgage on 5+ units? No way!

But 1, 2, 3, and 4 are okay!

This is great news for real estate investors, because it makes the financing market for these types of properties significantly more competitive than the options in the 5+ unit apartment building range. More lender competition = better loan rates & terms. Better financing options = more stable market of buyers (to sell your building when & if you decide to).

These facts are what makes 2 - 4 Unit Rental Property Hard Money Loans special.

About Glassridge 2 - 4 Unit Rental Property Loans

2 - 4 Unit Rental Property Loans are broadly accessible, and almost as easy to secure & get funded (if not easier) than even Single Family Rental Property Loans. This means they are a great option to consider when you'd like to get a higher rental income out of the same single property.

Similar to any of our Buy & Hold Loans, our 2 - 4 Unit Rental Property Financing will have a term ranging any where from 1 or 2 to 30+ years.

Generally, our lowest balance 2 - 4 Unit Rental Property Loans are going to be in the $100k - $250k range, depending on location & rental income. Plus, unless you're an ultra-qualified Borrower we've worked with before, you'll probably need to keep a lower LTV (in the 65% - 80% range), meaning you'll have a bit more skin in the game than on some of the higher leverage single family loan programs.

The good news is, even 2 - 4 Unit Rental Property Loans can be attained by Borrowers with less than perfect credit. For repeat clients, there is the possibility of using a Low-Doc or No-Doc program for a 2 - 4 Unit Rental Property, but it will be pretty rare.

If you have any questions about financing a 2 - 4 unit property buy & hold rental, feel free to contact us to discuss your situation with our friendly, US-based team of real estate financing specialists.