Apt complex 26 unit financing

[Autumn Rankin]

Looking at a 26 unit complex. Price $650,000 Got an email from the brokers finance guy He said -70-75LTC -5twar with 25 year am -indicative pricing in the lower to mid 6’s(depending on the sponsors strength) I am about to heloc my home to get the 20-25% down. Any advice on a commercial lender? Don’t really want to use the broker This is our 1st apt complex deal

[John Warren]

@Autumn Rankin I would focus on local banks as they give by far the best terms. I have found 80% LTV to be very realistic in this environment for buildings of this size. I recently closed with a local bank on a 19 unit apartment building in Berwyn, and we were able to get 80% LTV at a 5.2% interest rate with no points and no pre payment penalties. We were also able to get a 5 year term and a 30 year amortization schedule.

The apartment business is all about the relationships you build. Especially if you are buying these small to mid sized local deals, you will want to develop relationships with local banks so that you can underwrite effectively on future deals and know what you will be getting in the future.