Apartment Building Loan

Apartment building loan sources are numerous to say the very least. It can seem impossible to find the right source of funding for your business. A typical apartment building loan (also known as multifamily) is funding for the purchase or refinancing of a building usually with no less than 5 units. Before speaking with anyone it is helpful to have a “yes” or “no” answer to the following questions:

  • Is the property fully leased (about 95%)?
  • Do you want to borrow more than 80% of today’s value?
  • Are you willing to re-finance the property or are you planning on selling
    in the next 3 years or so?
  • Will you accept a loan with a large prepayment penalty?
  • Do you expect leasing activity in the building over the next 3 years
    (either from existing or new tenants) to increase the property value
    greater than 25%?
  • If the property value is increasing more than 25% over the next 3 years,
    will the loan request today be 75% or less of the increased value?
  • Will 50% of the building leases expire in any one of the next 3 years?
  • Are you installing land infrastructure, gutting the building or converting the use?
  • Is the property value greater than $10 million?

Have your answers to these questions ready then contacting any of the funding sources is easier.

onEntrepreneur

onEntrepreneur is an online magazine centered on the world of business, entrepreneurship, finance, marketing, technology and much more. We are regularly updated – sign up with our newsletter to send the updates directly to your inbox.

Leave a Reply

Your email address will not be published.