How to approach a lender for large commercial loans?

4 Replies

Hello all!

One of my long-term goals is to own a large apartment complex. One thing that I can’t figure out is how to find a lender for, let’s say, a 10 Million dollar complex.

I am very savvy and would love to run the numbers to show the lender what their return would be on the investment but at the end of the day, most any large lender is going to require a 20% down on such an endeavor. My day job will take a long time to save up for that type of payment and that is just not feasible.

I am trying to get my options and business plan together for something of the sort but I do not know where/how to start on that side of my journey. Do I have to come up with a solid numerical plan and present that to every bank until someone funds my business plan? I have a decent amount in savings but it is chump change on the large scale of real estate.

Any ideas/links/books on how to get started would be greatly appreciated!


Mack M

Hi @Mack Marchand , here are a few books to get started with: ABC's of Real Estate Investing by Ken Mcelroy, Financial Freedom with Real Estate Investing by @Michael Blank , Crushing it! in Apartment Buildings by Brian Murray. There are many, also great podcasts by Michael Blank and the Wheelbarrow Profits podcast among others. All the best!

Well, I would say you need to get even more savvy then because you running numbers won't show what the lender's returns will be but rather what you think your investors returns will be. The lender's returns will be whatever rate they are willing to lend to you for that specific property. Lots of books and podcasts out there. Get some education first and then approach the lender so you will be speaking the same language that they expect.

I am a CMBS lender and work on commercial real estate deals from $2MM and up and my average loan size is around $35MM. You dont need to show me my returns. Our internal models would show us that. What we need is a minimum net worth (100% of the loan amount) and liquidity (10% of the loan amount) from you and the collateral to be able to produce atleast a 1.25x cover. 25-30% minimum fresh equity in the deal is ideal. I agree with the other comments on here that a little education first would be very helpful so that you will be on the same page when you speak with lenders and equity partners. My profile has a comment that recommends some books to read. And baby steps first- a small multi would help you get your feet wet and that will give you the confidence when you dive into bigger deals.