Getting Pre-Approved and making offers on Multi family Apartments - 4-12 units

[Will F.]

Hey gang,

So I was wondering about the process for making offers on Multi-Family apartments.

I've had experience with purchasing small office and 1-4 unit properties in past.

I was wondering what the process is for getting Pre-Approved and submitting offers for 5-15 unit apartments.

1. Do you usually get a commercial RE agent first? or do you make offers direct?

2. What is process for pre-approval, do you just go to the Big banks and get pre approved similar to small residential loans?

3. Where are some places you find deals? I've been looking at MLS and Loopnet only. Anyone make direct offers to investors or anything creative to get a deal?

4. As far as representation, do you have your agent make offers or do you go directly to the selling commercial agent? (i'm guessing a lot will pocket list and want to get duel-representation to get a larger commission? )

Thanks in advance

[Michael Blank]

Local banks are definitely way to go for smaller deal sizes. You won't get "pre-approved" for commercial property as you do for residential property but you should establish relationship with a handful of lenders. Before I got my first property, I created a fictitious deal package and used that when meeting lenders. I used the meeting to give them a chance to know me better and do some light underwriting of the kind of deal I was looking for. I also wanted to better understand their requirements and the potential terms I could get. I also want to understand what they want in a loan package.

I do this all upfront.

Then, when you have a property under contract, the lender already knows you, and you can create a loan application package that he's looking for. The result of all of this upfront work is that you'll be able to get your loan faster when the clock's ticking.

Hope that helps!

Michael