Getting permanent financing for REO apartment

[Jimmy H.]

I am looking at purchasing a 72 unit apartment REO in my area. The bank is currently offering 20% down, 300 basis over prime with a 6.75% floor on a 20 year amortization and a 5 year balloon. Apartment is currently 75% occupied and I know it needs to be 90% occupied for a period of time before a bank will even look at it. It is an apartment that will be acquired under what would be it's appraised value - especially with higher occupancy (IMO - it is asking 900,000 and should appraise for at least 1.5 if run right and higher occupancy).

I have a few more details on the deal under my post - "Apartment REO analysis" - if interested

My thought is that 5 years is more than enough to fix this thing up, get occupancy up and get my "p's and q's" in order to get conventional financing.

I don't think rates will be going up anytime soon, but the next 5 years is hard to predict.

Given a couple years to get things in order 1) What exactly should I do from the very beginning of ownership to position myself the best to get financing and 2) what kind of permanent financing options would be available to me and what are my chances of obtaining such financing. I would like to get a LT fixed rate and just buy and hold for cash flow and appreciation.

I know that 80-90% of balloons are renewed but I don't want to have to depend on this, I am afraid that the bank is just offering this financing to get the thing off their books. OTOH if I am a performing note with good LTV at that point, maye it won't be an issue.

But i still want to seek LT fixed financing, what are my options, and what do I need to do to get there?

Thoughts?