Financing rehab - 50 unit apartment complex

[Stephanie Goodman]

I'm considering purchasing a government owned apartment complex that is totally vacant with 50 units. I can buy the property for next to nothing as long as I agree to rehab it, which I'm estimating will cost between 1.5 and 2 million. I've done quite a few residential fix and flips but never an apartment complex, and I've always used cash. 

What are the chances that I'll be able to get funding from a HML or other source for a substantial rehab project like this? I've submitted inquiries with several and I'm waiting to hear back but I've never worked with a lender before.

My intention is to hold onto this one, not flip it. 

[Nick L.]

I don't expect any HML would lend $2m on a single project - and the debt payments would be astronomical.

I would approach some commercial RE lenders in your area. It's a risky asset to lend on because of the lack of collateral so you will likely need a strong track record, a good amount of equity, a very solid pro forma and a flexible bank.

Woul you consider partnering with an experienced GC for equity? That might give more assurance to a bank and align the GC with your success.