Loans for $1million...How?

[Bruce Hansen]

So my brother in-law and I want to buy an apartment complex that’s less than a million dollars and around ten units. I HAVE NO IDEA HOW TO GET A LOAN. Do I need 20% down? Do I have to prove cash flow ability? Can I get away with 5% down. Are there any advantages if the loan is taken about by a HUB? Can I just walk into a wellsfargo and get this kind of loan, or are there specific types of commercial banks y’all would recommend in Texas? Anyway, I’m totally in the dark, so anything and everything is helpful. Thanks

[Guifre Mora]

@Bruce Hansen

Although every loan is unique and each lender varies with their requirements, one would find that these items are consistently what make up a comprehensive loan package. For the sake of ease, I have broken this into a few sections to break up different parts of the process. If you have more questions (you will) I’ll be happy to elaborate.

Quick Qualification

Use these items to quickly find out if you qualify for your desired LTV, LTC, loan amount etc.. This will only give a very broad picture, but will also give a relatively fast positive/negative indication as to the feasibility of the loan in question.

* Trailing 12 month, month-by-month operating statements (P&L).

* Current rent roll.

* Indication that borrower net worth is greater than the loan amount and borrower liquidity is greater than 10% of the loan amount. If otherwise, a discussion would be required along with a PFS (personal financial statement).

You would need to reach out to a Multi Family lender/Commercial Bank

20% is possible (depends on lender and loans scenario).

Take in consideration loans costs and that a higher downpayment will give you more skin in the game and lenders are more inclined to approve you.

Yes rents play a part as this is how the loan is repaid. (Net operating income must be 1.20 of the loan)

**All loan scenario are unique and cannot be generalized. Lenders do exemptions on good properties.