multi family and investment requirements

[Matt Tager]

hello I'm interested in multi family buildings I am at the very beginning stages but I have some concerns when it comes to getting the loans from banks. if I were to save up the down payment on a 1,000,000$ building (16 units, 4.5) 20-25%. would I also need assets in the amount of 200-250k for the bank to approve the loan? thank you !

[Mike Dymski]

Net worth >= loan amount

Liquidity (post-closing) >= 9 months P&I

Foreclosures = none

Bankruptcies = none

Credit score = 680+

DSC = 1.25+

These will vary by borrower, lender, and property but provide a starting point for discussions with lenders.  Case in point, I am prospecting for a property where I do not meet the net worth requirement above but I have an existing relationship with the lender (small apartment loan), strong W-2, and some real estate experience.

I'd also recommend getting your personal balance sheet updated, tax returns available, and schedule of real estate owned prepared (if you currently have any real estate investments).  And start calling around to lenders to introduce yourself, establish a relationship, find out their requirements, and find out their appetite for both you and your property type.  BP here is a good start...good luck with your search and keep posting.