Purchase an Apartment Building... how? what do I need?

[Addam Driver]

HI BP!

I'm looking to purchase my first commercial apartment building.  I know financing is different from standard residential units however I'm not sure exactly what I should prepare for. 

My questions:

How does financing typically work?

What are lenders looking for?

Anyone care to share their experiences?  

Thank you in advance!

[Stephanie P.]

Originally posted by @Addam Driver:

HI BP!

I'm looking to purchase my first commercial apartment building.  I know financing is different from standard residential units however I'm not sure exactly what I should prepare for. 

My questions:

How does financing typically work?

What are lenders looking for?

Anyone care to share their experiences?  

Thank you in advance!

 If you have no experience with properties this size, stick close to home.  Lenders will have a hard time lending you money if you're not close.  Many lenders have a 150 mile rule.

Different lenders have different rules and where they sell the loans determine the level of scrutiny each lender has.  Some don't care about the borrower's income, but put a lot of emphasis on their credit and experience.  Others want to see the property's income numbers for valuation and then borrower's financials.  

The short answer is the financing depends on many factors; income/assets and credit of all partners or parties to the transaction on the buyer's side, operating income statement for the building, deferred maintenance, occupancy all come into play.

Stephanie