Tips on Apartment Building and Multi Family Property Loans
Real estate investment has become an extremely popular way for
people to try to make money. Owning an apartment or multi family
housing unit can be a way to wealth, however, real estate
investing requires a lot of time, knowledge and up-front
capital.
Apartment building loans are often offered on two different
levels. The first usually requires a minimum loan of $500,000,
is a smaller unit, but comprised of no less than five units. The
second is for loans over $3,000,000, and is designed for
financing much larger units such as large apartment complexes,
student housing, or senior or assisted living facilities.
Most lenders will provide financing for units in good condition,
and have little deferred maintenance. If the building is in poor
condition, you may not qualify for a loan, or have to pay a much
higher down payment.
Apartment building loan sources are numerous to say the very
least. Before speaking with anyone it's helpful to have a list
of question you may want to ask. For example:
*Is the property fully leased (about 95%)?
*Do you want to
borrow more than 80% of today's value?
*Are you willing to
re-finance the property or are you planning on selling in the
next 3 years or so?
*Will you accept a loan with a large
prepayment penalty?
*Do you expect leasing activity in the
building over the next 3 years (either from existing or new
tenants) to increase the property value greater than 25%?
*If the property value is increasing more than 25% over the next
3 years, will the loan request today be 75% or less of the
increased value?
*Will 50% of the building leases expire in
any one of the next 3 years?
*Are you installing land
infrastructure, gutting the building or converting the use?
*Is the property value greater than $10 million?
Apartment building financing, or multifamily property financing,
is in a constant state of change. As a result, multifamily
finance providers must have thorough knowledge and awareness of
available debt programs and be prepared to quickly analyze
financing options.
Visit Security National
Capital today to learn more about apart
ment building and multi family property loans.