Have $250K, how to creatively finance a $2.1M apartment building?

6 Replies

Hello everyone,

There is an MLS listing for $2.1M 20 unit apartment building in California that seems to have all right numbers (back of the envelop analysis at this point). This is a major metropolitan area that has seen a double digits appreciation and rent growth for the past several years. I can come up with $250K for the deal.

What are the creative financing that I could do for this? I bought 4 duplexes in the area over the past few years. Remodeled them and now they generate $500 per door of cash flow. This would be my first apartment building though... 

Would appreciate advice and leads for lenders.

thanks,

Lenny.

@Lenny B. , I reckon you need to find a same-minded, same-heeled JOINT-Venture Partner. Good luck...

@Brent Coombs , thanks for advice. I know about joint venture and syndication, but would rather pull it together on my own.

We had a similar situation and financed the other 10% with the owner of the property which reduced his tax obligation and he still received the building if something went wrong. I don't know your area very well but for California that seams really cheap. What is your CAP Rate?

Investors need to know that and they need to know what class A,B,C, or D

There is not enough information to answer your question.  However, three things would give me pause.  1.  $105,000/door, 2 & 3 your comments about double digits growth in rents and appreciation.  It appears you are buying at the upper end of the market.

@Lenny B. Where are you in conversations with lenders? Not for nothing but $1.5 million in debt with a 20 year amortization table changes cash-flow compared to the 30 year most people like to use. And they could be open to less than 25% down if the have a big ol’ net worth.

You may be able to cross or alternatively have some seller financing!!!

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