Pathway to qualifying for multifamily loan

[Gloria Riley]

Hey BP! I am determined to (finally) purchase our first rental property in 2020. We've had analysis paralysis for way too long now. We have done some joint ventures in some real estate deals, but never done anything completely on our own (i.e. never had a mortgage). We don't own a home, we currently rent where we live. Question for lenders or others who have gone through this process:

If we want to buy a multifamily property, but we've never had a mortgage before, what exactly are banks looking for criteria wise when they approve you for a loan. Understanding that all banks have various credit score requirements and stuff like that. But I am curious if they generally care more about your income, your credit, if you had a mortgage before, etc.

Basically, where we are at is we are wondering if it's better to buy a single-family rental first (thinking that it will help us qualify for a multifamily loan down the road) before buying our first 20 unit property. Or if it's totally doable to buy a 20 unit property even though we've never had a mortgage before. Have banks given multifamily loans to investors who've never owned real estate before? Trying to figure out exactly what we need to do. Would love to hear your experiences and insight.

Thanks so much!