How can we obtain financing for an Apartment Complex

[Bridgett Elliott Golman]

How can we obtain financing for a 28 Unit Apartment complex? The seller is asking 900k and we currently have @ 1.5 million in investment portfolio with about 250k in equity. The equity is spread out and we would have to sell several properties to get the requisite 20% to 25% down payment. Do you guys know of other options or strategies. We would prefer not to sell our current properties.

[Mack Benson]

At $900k/door it probably wouldn't be worth going the syndication route. Most of my local banks are going for 25-30% down on a 25 year amortization. It will be a recourse loan and they are pretty adamant about that. You can start calling the local banks in the market and talking with their commercial lending department, this can be very time consuming so if you need to save time you can look for a local mortgage broker that specializes in commercial properties. I am currently working with one commercial mortgage broker who has relationships with about 20 local banks, when I call him he has the ability to find the best financing option for the deal I am looking at. Once you know what the banks will require you can take the next steps. I see a few different options for you.

1. Like previously mentioned you could try and get the seller to carry a note for the down payment.
2. Find somebody with the necessary requirements to partner on the deal.
3. Find a third party who is willing to carry a note for the down payment. This would be an equity partner.
4. If a broker is involved, could you negotiate with the seller to carry some amount of the down payment as a not and the selling broker? This is a pretty complicated option but I have heard it work in the past.

Good luck!