Mortgage Lending Strictness

[Shawn Thomas]

Looking into multifamily investing.. How strict are the mortgage lenders for that 80% of the purchase price? Are they very strict with making sure you & investors have enough Net Worth? Just want to have some sense of how the likelihood of getting these loans.

[Andrew Carlson]

Good question. One bank that I got an apartment approval from was willing to look at cash and equity in my house. between the two, I had over 20%. What seemed to be the most important thing to the bank was the deal itself...Does it cash flow even with low money down? Does it seem like a sound building, or is it a time bomb with a 100 year old boiler needing replaced in the next few years? Another thing that I think helped was a nice informational packet I made up using Google Docs. In it, I put all the specs on the building, the town population, employment, and the Who/What/When/Where/Why/How of managing the building. Bottom line, find a good deal, and make a solid case for why you and your investors are the right people to own that building.