Getting Approved for 5+ Units

[Byron Scott]

Hey Biggerpockets,

I am going to start going into banks this coming weeks with numbers and a plan to purchase a 5-10 unit apartment building. I'm new to this so I wanted to ask BP: What do you all think I should bring to the lender in order to get on the path of approval?

[Jeff Copeland]

Underwriting on a small multifamily will be based on your credit, income, DTI, cash reserves, and experience. The experience requirement can likely be met by partnering with an established property management company.

Banks also like deposit relationships a lot more than they like tire kickers.

So I would suggest:

1. Approaching the bank with a message of "I'm looking for a long term banking relationship, that also happens to include possibly lending for a multifamily investment property someday. Tell me how we can help each other." Will get you more traction than "Do you do loans on 5-plexes?".

2. Have your finances, taxes, credit, and reserves in order.

3. Have a property management company or two lined up and ready to go. 

4. If you really want to impress, bring a written business plan that outlines all of the above, and includes background info on you and your spouse (if applicable) or other business partners, your education and professional experience (even if not real estate related), etc.