Hi I was reading a few articles how people have figured out ways to get really high amounts of financing using unsecured lines of credits in big numbers that people use to buy apartment buildings and have property management companies take care of them. Good deals with CAP % at 8+ and very good cash flow. People even with bad credit who put things together with no more than 80% ltv and renters already in place its a very sure investment for a lender. Anyone looked at David lindhal’s real estate apartment riches its costly but looks like a very good evaluation+ teaching tool. Any insights would be greatly appreciated.
Thank You
I am not a commercial expert, but many commercial lenders, from my understanding, want to see management experience- that you have owned or managed this kind of property before. It’s kind of a catch-22, and purchasing something like this may be possible without it, but it certainly helps to be able to document that you have this experience.
Any newbie looking to buy a 100+ unit building is asking for trouble…
i never said I am going to be going into this alone + i plan to use a property management company I dont need advice on handling the property this is the hardmoney and financing section. I want to know if I can get approved for some sort of unsecured line of credit if the property has good rental and the lender knows the cap % and there is good cash flow if you hire a management co it decreases the risk but anyways that is not the question. I want to know what are my options in the lending area I have better than 690+ credit score.
Thank You
I JUST WANT TO KNOW ABOUT SUCH LOANS DO NOT NEED ANY ADVICE ON WHATS BAD AND WHATS GOOD
Don’t get all defensive. Frankly I think someone with no experience doesn’t have enough knowledge to evaluate a deal and whether or not it will cash flow. Many property management companies aren’t qualified to do so either so relying on one to do that part of the job may not work well either. And if you’re relying solely on the cap to determine the cashflow of this building I’m definitely going to say you’ll have some trouble.
Hi there. Are you wondering about the unsecured LOC so you can fund the down payment? On commercial deals the property’s income is the driver of the transaction. The most aggressive program I have seen for multifamily acqusition is up to 92.5% (with a seller contribution of 7.5%) and a 35 year amortization.
To come up with the down you can get an unsecured LOC - most likely if you have a business - or you can get a LOC on equity in another property.
i have a great evaluation process/tool that is going to answer all those questions if the deal is good enough and will be a good investment
Btw, you’ll have a better chance of eating an ice cream cone in hell than getting 100% financing on a 100+ unit building. And that’s for secured, unsecured lines that big are even more rare. Wish for that and wish to win Powerball, see which wish comes true first.
Commercial lender will want to see a track record of managing before, funding the loan. Management fees will run about 5%.