Financing a apartment deal?

[James Conaway]

I own multiple properties including a 4plex, I am very familiar with residential financing requirements. I am exploring the requirements for purchasing a apartment complex 25+ units. 

Can anyone outline the typical requirements from a commercial lender or finance a purchase? How different is it from residential financing? (down payment, qualification process, etc...)

Are there any recommended commercial property financing companies I could start talking with?

[Jeff Matlock]

James,

Depending on who your lender is I would expect the following terms for 25+ unit multi family property in Phoenix.  This is assuming a stabilized rent roll of 90% occupancy or greater.

The lesser loan dollars of 1.25x Debt Service Coverage Ratio and 75% Loan to value

Recourse with a bank 

Non Recourse with an Agency loan

Rates in the low 4% to mid 4.5% range depending on how long you want the fixed rate

Closing timeline of 45 to 60 Days.

Most lenders will require recourse.

2-3 years of tax returns

Current rent roll

2-3 years of operating statements and the current year to date property operating statements

Resume - Highlighting your real estate experience

Some will pull credit others will not

10% post closing liquidity of the loan amount

Net worth of about 1.5x the loan amount

3 years of tax returns and all K1s

I hope this helps.

Jeff