Please forgive me if this has been discussed. Couldn't find the answers I was looking for. How hard is it to finance a $550k apartment building? Is great credit required? What about down payment? I'm 40 and it's way past time to get a portfolio going. I'm also a Realtor and am familiar with wholesaling. Have wholesaled a couple. Thanks in advance.

Hey @Detric Moton that's a pretty big question. Typically commercial loans want to see 25 - 30% down payments. Good credit always helps loan terms - but you knew that.

There is lots of room to be creative. Partners, hard money, HELOCs, etc.

The good news is that if you really have a deal, you'll be able to find the money somehow. You'll figure it out - just stay with it. Forty is a fine time to get started.

Best to you.

@Detric Moton

From one relative novice to another, take my advice for what its worth.  I have not bought an apartment building yet, although I am currently preparing to enter this market.  The main difference between commercial real estate, which is what an apartment building is considered, and residential real estate is that residential real estate is purchased to live in and commercial is purchased for the value of its cash flow.  Every thing about each genre stems from this fact.

For example, the price of a given piece of commercial real estate is calculated by the income it produces and the market rate or return an investor expects for putting their capital to work in that market. Value=NOI/Cap Rate. A residential piece of real estate, on the other hand, is valued based on what other homeowners have recently paid.

Thus, financing for commercial real estate is based less on the individual borrowers ability to pay and more on reasonably expected cashflows from the deal.  

My single biggest piece of advice, if you are really interested in buying an apartment building of any sort, is to take the time to really, and I mean really, educate yourself ahead of time.  You will invariably need to use a lot of other peoples money, whether from banks, investors, equity partners, or any other sources, and you owe it to them to be knowledgeable before you put capital at risk.  

@ least 25% down.

DSCR of 1.2 or higher.

Strong net worth.

Thank you all for your responses. I understand residential investments, but this is somewhat new. I've seen some of this at my local reia meetings, but never really looked into it until now. I think multifamily is the way to go. Rental market is stronger than the housing market here.