How I financed my multi-family properties

[Bradley Jernigan]

Financing a multi-family property typically involves several steps:

1. Down payment: Ensure you have 20-30% of the purchase price for a down payment. Most conventional loans will require you to bring around 25% of the purchase price for a down payment. This, however, does varies depending on which loan you can receive as some lenders will finance up to 90% of your deal.

2. Evaluate your credit: A good credit score will help you secure better financing options. Check your credit report and address any issues if needed.

3. Research loan options: Explore various loan programs, including conventional mortgages, hard money loans, commercial loans, and FHA loans.

4. Research and connect with mortgage brokers: You can work with mortgage brokers who will help you find the perfect lender for your situation. This is the way I went to help finance both of my multi-family properties. 

5. Pre-approval: Get pre-approved for a mortgage to determine how much you can afford and to strengthen your offer when making a purchase.

6. Consider property income: Lenders may consider potential rental income when evaluating your application, so make sure the property's income potential is appealing to lenders. Learn how to calculate what is a good deal and what is a bad deal.

7. Review property expenses: Factor in other costs, such as property taxes, insurance, maintenance, and management fees, to ensure the investment is financially viable.

8. Complete the application process: Gather the required documents and complete the loan application process with the chosen lender. This usually depends on the lender as some will require many documents while others will not require as much.

9. Get an appraisal: Lenders typically require an appraisal to determine the property's value and ensure it aligns with the loan amount.

10. Close the deal: The finish line is finally here and the lender loves the deal. If everything checks out and the lender approves your application, proceed with the closing process to finalize the purchase.