Investing In Apartment houses

I am a Real Estate Broker in Texas and invest in Single family and duplexes. I want to pursue investing in 5 units up to 30 units. What kind of down payments does this require or is it common for owners to owner fincance these? I have no problem in investing in apartment houses outside of Texas.

To invest in 5+ units the down would be 20%. Sellers carry 10-20% a lot of the time. Investing in 5-30 units is a bit more involved. You can go stated and get 75%LTV. Full doc would get you 80%. That’s if you have the FICO score. You’d need the rent roll and income/expense for the past two years. Just know that it’s not quite as easy as single family or 1-4 units where you can get 100% with a good FICO.


I wanted to say thank you for replying. I have just had a hard time flipping single family homes with all the new laws in Texas on flipping. I have had good luck on the duplexes.

Have you concidered non assisted Senior Citizen apartment complexes? In some cases there is no down payment. The government has billions of dollars sitting in accounts that are not being utilized. Ted Simpson

Thank you for your response. Where do I find the information on the money available and where do I find these Senior Citizen Apartment Complexes. Thanks again.

Patrick Stanford

Hello Ted Simpson,

I saw where you responded to someone regarding government grants. How would I come accross those and what could you use them for on Multifamily invensting. Are they hard to get. Thanks, Patrick Stanford

I would first of all like to refer everyone to the following website. It is concerning real estate grants. An entire wealth of information.

Second, there is interest only loans that will get you in the door. If a down is asked for you can do a 2nd. Once you have possession you can refinance.

Three options: (1) Cash and Carry
(2) First Lien 60% with Owner Finance 2nd
(3) 60% on1st 40% on income producing

Thank you so much. It is very hard to get a commercial loan around 60% and have the owner carry the rest. Thank you for your repsonse.

As a loan mortgage broker I’ve had success getting borrowers up t0 90% 1st w seller carryback.

These loans are harder to qualify for - but if you have an experienced broker w/lender relationships they can get you funded simply by teaching you how to package your deals (90% of the hard part).

My partners and I have had more success w/apartments @ 80% - if you’ve got a good loan package (property, cash-flow, expeirence) you should have no problems.

Government programs and grants are great - but, you might pass up several good deals over the time it takes for you to meet all the qualifications.

Peace 8)

Thank you for your response.
Patrick Stanford

Patrick -

Intermediate commercial financing products are becoming more and more available. As a real estate broker, you are already aware of these types of products available for your residential clients - i.e. 100%, No MI, 1 day out of bankruptcy, No VOM/VOR, 600 FICO - etc. etc.

Up until 18 or so months ago, products like these were rare rare birds in the commercial arena. The banks will loan money for commercial deals amortized for 20 to 30 years but with a 3, 5, or 7 year ballon. Other lenders have $500,000 to $1,000,000 minimum loan amounts, etc.

Nowadays, however, commercial lenders are emerging who will loan money for commercial purchases (apartments, mixed use, retail, mobile home parks, self storage units, light industrial, etc.) with guidelines such as FICO as low as 575, 80% LTV and 90%CLTV (you will be hard pressed to find commercial lenders exceeding 90%), minimal documentation to qualify for a ‘full doc’ loan and it’s commiserate lower rates, loan amounts as low as $100,000.

These are exciting times in the commercial lending area as we see more new products and offerings to put in front of our borrowers.