New investor, first property, multifamily, lenders on deck

4 Replies

Ok, I’ve been searching for the money, but can’t possibly know if they,re what I need to move forward, which is looking for multifamilies, do the numbers, and put In an offer, because then I‘ll have the informatIon to gIve the lenders, rIght, easIer saId then done! I might be over thinking this but wondering if there’s a chronological order that I need to follow that I’m over looking, like step one, step two, so forth and so on, input need!!!!

@Eric O'neil  

Alright so this is a general overview, not meant to serve as a guide but it should answer some of your questions.

1) Decide exactly what your looking for. # of units, Price Range, area, on or off market deals, ect

2) Start looking at all the on-market listings that you can find that meet your criteria. Analyze them. Get comfortable running numbers. It doesn't matter if you actually want them or not. Your practicing right now.

3) While working on the previous task, Find lenders in your area. Talk to them about their loan options for the kind of properties your trying to find. This is partially about finding good terms, but mainly about networking and building relationships. Get preapproved.

4) Start narrowing down your search. Look hard for properties that you would like to purchase.

5) when you find one, run the numbers as best you can, with all the info you have access to.

6) make an offer based off your calculations. 

7) if offer gets accepted, run numbers even harder, do inspections, do everything you can to make sure it's a good buy. contact the lenders you talked to before and secure financing.

8) if it all works out, close the deal.

Hi Eric,

When you say "searching for money", are you referring to banks or are you referring to passive investors?

Either way, you need to know how much money you have to put towards a down payment, because that will tell you the loan size you can qualify for.

When speaking with lenders, they are going to ask you how you plan on funding the deal. If you are using your own money, then the answer is simple. If you are using other people's money, then you'll want to get verbal interest before speaking with lenders.

Personally, I want to know how I will fund a deal, or know that I am capable of funding a deal, before looking for deals.