Posted by Bob on April 13, 2007 at 18:48:24:
“(who has experience)”. either you or your seasoned management company. key word = experience regardless of the deal.
Apartment Building Lenders!!! - Posted by Paul Kaiser
Posted by Paul Kaiser on April 11, 2007 at 14:24:28:
I am a first time buyer of property, down payment is no problem, but I have no credit history of property purchasing, etc.
I only look at deals with at least 1.2 debt coverage ratio, that cash flow with strong cash on cash returns (10% neighborhood).
With a solid deal will I get financing if I have the downpayment but I don’t have the credit? Will the commercial lenders look at the deal more than me personally?
Thanks
Paul Kaiser
now having comfort from these responses… - Posted by CarolFL
Posted by CarolFL on April 13, 2007 at 07:01:09:
get Ray’s Dealmaker’s Guide to Commercial RE if you don’t already have it. Depending on the size and the deal you will have in your hands all of the guidance you need to put together a loan request that should get you where you need to go, and then all of the info you need to keep moving.
I was spending time “in the book” again last night, and soaked up some more.
However, DO pull a trigger - sometime. Don’t sit there thinking you have to know everything first and do everything right. You have great resources here, and folks who will be more than happy to play devil’s advocate to your deal.
Life is short. Eat dessert first!
CarolFL
Re: Apartment Building Lenders!!! - Posted by Patrick S. Lawson
Posted by Patrick S. Lawson on April 12, 2007 at 08:37:17:
You are way ahead of the game. You know how to look at property financials and derive the ratios that lenders are primarily concerned with.
Question: Do you have no credit as in no score or no credit as in never purchased a home/investment property?
Most all commercial lenders look at the deal and the amount of skin(equity) the borrower has in it vs. the borrowers credit/assets/investment history.
Re: Apartment Building Lenders!!! - Posted by Matt Weiler
Posted by Matt Weiler on April 11, 2007 at 19:32:25:
Call me I will 100% be able to help you. 561-362-3249
Re: Apartment Building Lenders!!! - Posted by Alex
Posted by Alex on April 11, 2007 at 18:54:37:
Call me I have a creative lender
Alex (317)507-7502
Re: Apartment Building Lenders!!! - Posted by Paul Kaiser
Posted by Paul Kaiser on April 12, 2007 at 10:02:12:
Yes Pat, it’s the latter, I have never purchased Real Estate of any kind. I live in CA and can’t mentally justify $500,000 for a condo so I’ve never bought. However I’ve been studying RE for about 2 years, starting with Asset Protection, Tax Strategy, Purchasing techniques, Commercial, etc, etc. My own personal schooling. I’m ready to pull the trigger this year and now have money saved away, and a resource for private cash. So my credit only contains credit cards, car loans, etc. I’m also a contract Design Engineer by trade so I move from job to job typ about every 8-14 months. Great income, but banks don’t like contractors I understand.
My plan is to also have a Certified Property Manager manage the apartment, and have them write me a business plan for doing so that I will hand to the lender. I’ve heard that can ease their nerves with a guy like me. We’ll see.
Thanks for the input everyone, this is reassuring.
Re: Apartment Building Lenders!!! - Posted by Doug O
Posted by Doug O on April 12, 2007 at 10:31:14:
Paul, most lenders will put far more consideration towards the deal than the borrower for larger apartment deals… ie, having a credit history or experience is certainly helpful, but if the deal is strong enough and has cashflow existing, you shouldn’t have too much of a problem finding a solid loan deal.
You should be able to get a rate in the 6.25-6.75% range, even for loan amounts up to about 10MM, as long as the deal has strong numbers (and you were putting up at least 20% (stronger deals could allow you go as low as 15%)). And by providing a plan from a management company (who has experience), you’d definitely be ahead of the game…