How do I get a bid loan?

Question

I have been doing buy and holds for some time now.  But that is not the big time.  I want 100+ apartment complexes.  How do I get a loan of $5-10 million?  I wouldn't know where to begin.

Gentry B. · Answer

Wow, @Tim Milazzo, Thank you!  That is great information.  I will check out your blog.  Thank you again.

Tim Milazzo · Answer

Hi @Gentry Boswell - awesome that you're looking to move up into larger deals! When you get to $5-$10M deals, you're now entering an arena where there's a lot of competition, and a lot of options as far as financing. Assuming you're looking to finance a stabilized, cash-flowing property, then there are a few government-backed programs that will definitely be in the mix including Fannie Mae and Freddie Mac, which both offer low fixed-rate terms, but there's also HUD (FHA) financing for multifamily assets if you're looking for a super long-term option, which loan terms as long as 35 years. Banks are players in this space, but you may be getting beyond the scope of your local community banks, so you'd want to start to compare some national bank lender options - some lend balance-sheet, and others securitize (CMBS).

I write about and help people through this sort of thing so check out a couple of my BP blog entries here, but please reach out directly if you have more questions or would like advice on how to start up the above. Thanks!

Multifamily HUD/FHA Financing: Beginner’s Guide to HUD/FHA Multi-family loans

Fannie Mae/Freddie Mac: Starter Guide to GSE Multifamily Financing

Bob Okenwa · Answer

@Gentry Boswell

You should try speaking with a loan officer in the commercial lending department of whoever you bank with. Credit Unions and regional banks may also be places to search as they tend to be a little friendlier than the big box banks.