Altameroy Blog

Property investment has become an extremely popular way for people to try to make money. Owning a loft or multi family housing unit can be a way to wealth, however,property investing needs lots of time, information and up-front capital.Apartment building financing, or multifamily property financing, is in a constant state of change. As a consequence, multifamily finance providers must have in depth knowledge and awareness of available debt programs and be ready to quickly investigate financing options.

Most multi family or apartment loans have a thirty-year term with IRs from 4.7% to 6.625% for loans up to $3 million. I learned that most of the time these’smaller loans’ carry a little higher interest than loans exceeding $3 million and are termed as ‘recourse’ loans ; in other words, if you welch on the loan the bank may take ‘recourse’ by seizing your non-public assets. Loans in excess of $3 million are termed as ‘non-recourse’, meaning non-public assets are protected in the event of a borrower default. Additionally, most lenders offer basic options like fixed and variable rate loans.

There are 2 first methods to pursue multi-family buildings that leave your valuable liquidity intact. One is to secure seller helped financing to complement a loan, leaving you with little to no money of your own in the deal. The other one is to use others’s cash ( or OPM ) in the place of your own money. Each has its advantages and drawbacks and my focus in this article is to help illustrate how your presentation of the upsides to a multi-family investment will help you attract funding. The key to enticing funding is to remember why you are investing in these properties in the 1st place. Multi-family properties are ideally purchased at a reduction, are located in areas where time and natural market conditions will increase their worth, and produce cash flow. This time tested benefit of multi-family property possession is a huge and when securing funding for your deals.

I strongly advise that you summarize your loan scenario on one 8.5 X 11 in. sheet of paper. You could be lured to write down a multi-page outline full of details, projections and analysis. Do not. The goal of the primary approach is to get a loan officer interested, not a lot more. A borrower who has a lender asking for information is in a much stronger position than a borrower who is sending information uncalled-for. This strategy of approach will generate responses from interested lenders as-well-as denials from lenders who can’t help you. People who are interested will request more information and if the deal fits with their criteria they’ll issue a term sheet. The secret is to get them calling you, pique their interest first and then sell them the deal when you get them on the phonephone. Before you know it you will be sitting at the closing table.