BiggerPockets

Hi all,
First time posting, but have been reading and researching the many great resources on BP for a while now. I am interested in purchasing commercial 8 - 12 unit apartment buildings in MA and am not very familiar with the commercial lending that would come into play. As I understand it, typically requires 30% down or LTV = 70%. Assuming I had the 30% down, what other requirements are there to overcome? Do banks usually require a track record of REI or some other requirements? I'm trying to get educated pretty quickly before speaking with lenders about some properties I am interested in. Thanks in advance.

Thanks for the info Mike. I guess my next step is to find a commercial lender that I can work with. Are there any spreadsheets circulating this forum used to help evaluate the health of the deal that I coud use as a tool to position the health of the property to a potential lender? I have read much about the 50% rule of thumb, but looking for something with a little more analysis to it.

Thanks,
Adam

Thanks for the information guys. This property needs a fair bit of work, but has very good potential. Based on the DSCR formula, the ratio is 2.3, so would be viewed as a lower risk/good deal to a lender.
Does anyone have example spreadsheets/documents they use to package/position a deal in order to present to a lender? I would rather use something that is known to be acceptable and work rather than zero base everything.

Thanks,
Adam

Adam - I do remember seeing some spreadsheets circulating but I'd definitely advise making an investment in 1) R.E. software or 2) find a firm that can do it for you.

Especially if you are new, don't have a great track record (15+ years of quality investments) then it is by far in your best interest to get help up front.

There are some great firms that specialize in helping investors analyze every facet of an investment and more important help you prepare everything you need to send to lenders. I can't tell you how much of a difference it makes in securing good financing terms. Additionally, you will learn valuable skills that you can then implement on your own for future investments. It sounds like you could really benefit from some solid guidance. We have a in-house analyst and thousands of spreadsheets but we still often use a RE analysis firm b/c of their knowledge and reporting (offering memorandum, lender packets, etc). Some firms charge practically nothing for amazing stuff.

I've worked with just about every software out there (ie. argus, planease, roi, waterfall irr, RE benefits etc) and they can be very helpful. Never used it, but for $39 bucks, Jack's software looks solid.

If you are just looking to build your knowledge base, there are a number of quality books and financing websites that have more info then you'll ever need. Just google!!

good luck

Well, Blake, I think you know good and well this is Jack's tool, since you and he are both posting from the same IP address in Maryland. Sure you're not actually Jack?

Well, Blake, I think you know good and well this is Jack's tool, since you and he are both posting from the same IP address in Maryland. Sure you're not actually Jack?