Requirements to get a loan for large multi family deals?

Question

What is required to get a loan for a multi family deal such as a 12 unit apartment complex?  As I have been researching and reading, I understand that lenders are looking for some experience and a track record. That said, what does that translate to in terms of specific requirements?

Dan Gamache · Answer

@Matt Ferch Private Lenders in this area definitely would like some experience. The specific property (location, etc) will play a factor. If you can do 25%-30% downpayment, property has strong cash flow, and you have assets you would have a good chance at getting financing. May require you to hire professional property mgmt co in lieu of experience.

Stephanie P. · Answer

Hey Matt

The lender is going to ask you the same questions you should be asking of the Realtor.  They are going to want:

• Their application
• Guarantor's credit
• Operating Income Statement for the last two years and it should include the cost of all utilities.  
• Leases.
• Many want your taxes, some do not.
• If it's a rehab loan, your scope of work and exit strategy
• Cash for down payment (usually 25% minimum), closing costs and reserves if they need them

Stephanie

George Despotopoulos · Answer

If you have the required credit score, experience, and the loan amount would meet the lender's minimum, then expect to put at least 20% - 25% down, the rate to be in the 10% - 13% range and the origination fee at 2% - 4% for a short-term (6 - 18 months) interest only bridge loan (bridge to sale or bridge to perm financing).

Other requirements may be that the property cash-flows positively (The DSCR is above a 1.0, many have a 1.15+ requirement) and that all the units are residential.

Andrew Postell · Answer

@Matt Ferch Bigger Pockets does have an entire Multi-Family forum.  It might be a good idea to post this there too.  Might get some good responses there as well.  Just an idea.  Thanks!

Requirements to get a loan for large multi family deals?

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