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.