Looking for commercial loan

[Nicholas Weckstein]

I've posted on this topic before but I find myself needing to understand this better. And what better place to turn then bigger pockets! I want to get into commercial properties. Mainly apartment buildings. Id like to know what the terms and requirements are. So for example. I find an 8 unit building for say 300k. What is the going LTV ? Credit score requirements ? Property DSCR ratio ? What are some typical loan terms What else do commercial lenders look for. What will it take to be pre approved ? In my mind I'd like to find something with a 7-10 year balloon payment amortization period of 20-30 years. I'd put 20-25% down. I have one multifamily property, so I do have experience. The plan is to keep buying commercial properties. Once their paid off. Cash out Refi and finance bigger and bigger acquisitions. Thanks in advance !

[Andrew Johnson]

@Nicholas Weckstein I think your bigger challenge is going to be on the back half of your "in my mind" scenarios.  I don't think you'll be able to combine 20% down + 10 year fixed w/ balloon + 30 year amortization period.  Odds are it will be:

5-7 year fixed w/ a balloon

20-25 year amortization period

25% down

So if you're running your financial scenario (prior to talking to banks) it's only practical to go into it assuming those are your "given" parameters.  Will you run into some wiggle room along the way?  Probably.  Maybe.  I don't know.  If you have perfect credit, $2 million in a stock portfolio, etc. you'll have more leverage.  Banks love to lend money to people who don't need it.  It makes sense, it de-risks the probability of a default.  

Side note, you'll likely be asked to fill out a PFS (personal financial statement).  You can probably find a template of one somewhere online and basically bring that filled out with you to the bank to see how that would/wouldn't impact qualifying for the loan.