Is this accurate (from a conversation with a Cleveland broker)?

[Shiva Bhaskar]

This week, I spoke with a multifamily broker in Cleveland, whom I found on Loopnet. I'm new to this market (based in Los Angeles, where I mainly invest today), and trying to build a team of capable folks in CLE. 

He indicated that a lot of multifamily deals, maybe most, in the range of maybe $350,000 to as much as $900,000 in CLE are cash purchases, and investors take out a mortgage with a bank later. Is this accurate? It's not a deal breaker by any means, and I"m familiar with this in many markets, but I wanted to make sure this isn't complete BS.

He also said that a lot of more local lenders don't want to work with out of state investors on multifamily loans, perhaps because of a lack of recourse on the loan? He suggested working with larger national lenders like US Bank, Wells Fargo etc, and offered to connect me with loan officers in Ohio for those banks. Not opposed at all to working with larger lenders (current WF customer actually), but again, I want to know that this is accurate, because I have found that smaller and local lenders sometimes offer better deals. 

Any feedback appreciated. 

[Jay Hinrichs]

@Caleb Heimsoth  not lending to out of state folks is normal for local banks in any market. 

they simply wont lend to anyone who does not live there.. 

I was running into this in 2000 or so.. when i started looking all over the country.. 

and the reason the bankers told me.. and this relates to rental property.

is that the risk of distant landords they determined is to high.. and they do better with locals 

who they know like and trust.. 

it took me 3 years to find a local bank in Charleston to fund my deals there ( new construction) and even at that they limit me to one million.. were my credit limit in Oregon is 10million.. ( becasue i live and work here and know my banker etc etc) .. national lenders being who and what they are ..   are the one's that loan on this stuff.. and for MF there is some sort of fannie type loan product as well that does not require you to be local. 

its all based on RISK  the local banks look at lower end rentals as HIGH risk.. and then extreme risk for someone who does not live there..