Chicken or Egg First? I Am Seeking A Commercial Loan...

[Justin Bullock]

I am a realtor out of Jacksonville, Florida. My mentor has agreed to provide me with the funds (up to 25% and the rehab costs) to fill the gaps for a commercial loan so that we can buy an apartment, anywhere from 5-30 units or so. I have great credit but, my taxes will not be sufficient since I am self-employed. Here is my question:

What order do I go in to get a loan to purchase a deal? Do I find a deal first and then go to a bank to try to get the loan or do I need to get pre-approved with the bank for the loan first to get the deal? 

Any advice, please help. 

Thank you,

Justin M. Bullock, Realtor

[Tamiel Kenney]

@Justin Bullock I agree the property is more important, but you will also want to put together a Personal Financial Statement (PFS). I would then go over the PFS with a lender to get their thoughts on what price range you are able to pursue. When you are purchasing apartments, there are some general rules that a lender will expect. For example, a lender will typically want your net worth to be 100% or more than the loan amount. Also, your post liquidity funds will need to be at least 9 months of principal & interest to 10% of loan amount. However, you can have others sign on the loan with you if you do not have enough net worth or post liquidity requirements.  Hope this helps.

Mark & Tamiel Kenney