How to Finance a Small Apartment Building

[Jim Macedon]

I know FHA offers apartment loans at 87% LTV. That's great, but what if the apartment building I want is still slightly out of reach? Is there anything else I can add to the stack other than friends and family's money? Will a bank add a second mortgage? (Or does FHA even allow a second mortgage?)

[Alex Bekeza]

@Mark Creason He's talking about FHA 223(f). They do 87% LTV. @Jim Macedon They allow up to 7.5% in Subordinate Debt on a case by case basis.

Couple of key points on this product:

Minimum Loan Size is $1 million

Experience is required so @David Acosta 's point of partnering is typically the best idea

Property must debt cover over 1.17. With such a high LTV loan which requires mortgage insurance you may have a tough time finding a deal that would cash flow.

Oh wait here's the best part of this program.....

Average processing time is 6-9 months!  lol anyone else still interested?

In my opinion..... you're 100 x better off finding a principal partner and coming into a 5+ unit investment with at least 20% down.