Type of loan needed to buy an apartment building/requirements

[Matthew B.]

If someone with a $200K down payment and only SFR landlord/management experience wanted to get a loan to buy an apartment building, what type of loan would it be and what are the requirements to get the loan?

[Greg Kasmer]

Matthew - The "agency" lenders (Fannie Mae and Freddie Mac) do require some multifamily experience for a few years to determine "lendability". However, I have heard others say that you can "show" experience by brining in a well experience property management company - however, I would not rely on that as a way to make sure you quality for a loan. The other avenue I would suggest is speaking with regional banks/credit unions about multifamily investing. They typically offer LTVs around 75%, slightly higher interest rates than agency loans, and 25 year amortization (instead of 30 year). However, they are more flexible with experience and often times even loan for renovation costs along the way - which can significantly reduce your out of pocket costs and increase your returns. I'm actually in the middle of securing a loan with a credit union, so if you want to chat, please feel free to reach out!