First deal, bad credit and large opportunity

[Joshua Nicholas]

Hi everyone,

I'm looking to purchase my first MF deal and I was hoping the Bigger Pockets community could help me with some issues I'm facing. Brief intro, I'm 27 and I became a commercial real estate agent last year. 

I have poor credit (around a 550) due to some credit cards I allowed my parents to take out while I was in college that were defaulted on. Last year was my first year in real estate and I didn't make much in the way of commissions (lived off my savings) and as such, my tax return is going to be quite pitiful.

But recently I had a personal windfall where I made six figures, and I've raised $1.2mm in equity from some friends and family. In addition, I have a willing guarantor who owns $400mm+ in MF property.

The issue I'm worried about is that some mortgage brokers I've spoken with, and Michael Reinhard's book on commercial mortgages, say that I need to have 3 years of proven income (I changed jobs a bunch after college) as well as good credit (don't have) and previous ownership experience (don't have) in order to get a loan.

On the other hand, when I read things from some other sources like the BP forums, or from investors like Dave Lindahl, they state that with a strong guarantor a bank will still give me a loan to buy a property even if I have weak credit, insufficient net worth or lack of experience.

I'm looking at some deals and I would be looking to borrow 65-70% LTV, non-recourse and 10yr fixed and all of the deals I'm looking at have a 1.6+ DSCR.

Is there any chance I can get a loan with my problems due to the strength of my guarantor or is it futile and I should just get a new job, wait a few years until my credit is 700+ and then attempt to get started.

I'm more nervous than anything about spending countless hours underwriting a deal, spending money on due diligence and asking my guarantor to spend time applying for the loan, only to be embarrassed when I get turned down. I obviously don't want to ruin such a valuable relationship 

Any advice/help would be GREATLY appreciated.

[Karen Margrave]

@Joshua Nicholas First off, you never know until you try, and even if you are turned down one place, keep going until you find what you are looking for. That's the nature of the beast, if you are going to make it, be willing to do what you have to do to get it done, and don't quit! (as long as it's a good deal and makes sense, if it doesn't one of the most important things in real estate is to learn when to walk away!) 

What are the numbers you are looking at? Post the information so that we can see what it is you are trying to accomplish. What is the asking price of the property? Number of units? Income? Expenses? Age of the property? Location (city, you don't need to be specific) How much do you have to put down? Who holds the current loan on the property? (they may want to stay on as the lender with a good guarantor, etc.)