APARTMENT LOANS

Hello everyone, I'm a new Real Estate Investor who will be working with an experienced Property Management company while acquiring my apartment building. Does anyone have any suggestions on the best possible financing for the above scenario as well as what do I need to prepare for the lender?

Darryl Dahlen

Commercial Loan Officer

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Dec 17 '10, 12:06 AM

Hi Karin.

I have a couple questions for you.

1. How many units is the property?
2. What is the occupancy level?
3. What is the purchase price?

If the property is under 500K, I have a good program. Max LTV is 75% so you would need 25% down.

I just got a quote for 5.5% fixed on a 5/30 for another buyer. No appraisal needed, and the only lender cost is title, escrow, and $1000 at time of term sheet, but that fee is applied to your first payment. You need a 700+ credit score though.

This lender is a national bank.

Rich Schroeder

Real Estate Investor · Wisconsin

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Dec 17 '10, 02:23 AM

Originally posted by Karin Hemphill

Hello everyone, I'm a new Real Estate Investor who will be working with an experienced Property Management company while acquiring my apartment building. Does anyone have any suggestions on the best possible financing for the above scenario as well as what do I need to prepare for the lender?

The best possible financing is to have the owner finance the entire amount for 30 years.

Bryan Hancock

Real Estate Investor · Austin, Texas

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Dec 17 '10, 02:47 AM

Actually the best possible financing has the owner finance the property, non-recourse, at below market interest rates or loan constants if the note has a longer term. The rates will be subject to imputed taxation, but it is a small price to pay for cheap money.

Care must be taken to not overpay for the property if the seller finances it though!

Bryan Hancock, Bullseye Capital Real Property Opportunity Fund
E-Mail: b.hancock@bullseyecap.com
Telephone: 1-800-577-0401
Website: http://www.bullseyecapfund.com
I help busy people profit from real estate

Tod R.

Real Estate Investor · Southlake, Texas

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Dec 17 '10, 06:42 AM

Darryl,

How do you get away without an appraisal on a bank loan?

Tod R., Thompson Realty Corporation
Telephone: 817-781-1942
Website: http://www.thompson-realty.com
radyakllc@gmail.com http://www.thompson-realty.com

Darryl Dahlen

Commercial Loan Officer

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Dec 17 '10, 07:22 AM

The bank does a property evaluation, just not a full blown appraisal. This program is also used for commercial equity loans, and lines of credit, so it is very flexible.

Since it is a retail only program, it was a hard program to find, but I'm glad I did since the low closing costs, and good rates, makes my life easier.

I should note that the bank normally has a 1% origination fee, but they are waiving it right now as a special. I typically charge 1% or $2500 whichever is greater.

Phillip Walker

Real Estate Investor · Oakland, California

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Dec 18 '10, 02:55 AM

Hi Karin,

I don't know what size apartment building you are buying or the purchase amount. You can look at the following program.

A FHA Program 223 (f) program can be considered.
* $2 Million to $50 Million loan amount
* Purchase or Refinance
* 85% LTV for purchase , 80% LTV for CASH-OUT Refinances
* 1.18 DSCR, 35 year terms, fully amortizing, market rates
* Non-recourse except for standard carve outs as required by HUD
* 660 credit scores
* Knock Out's - lack of equity or down payment, weak financials, weak business plan or past operating experience(working with someone with experience would be very helpful), unacceptable property types, must show income.