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Still Good Options, Apartment Building Loans

We are still seeing strong options on apartment building loans, in the 0,000 – ,000,000 range.  This segment of the commercial mortgage industry is holding its own and doing a lot better in terms of programs, rates and underwriting flexibility than the typical owner occupied or commercial investment property loans.

Five year, seven year, ten year and even 30 year fixed rate financing is still available.  Again as a comparison, 5 year fixed is now, normally the longest you will now see on other investment property loans.  Amortization schedule also are aggressive normally at 30 years with a few programs to 35 and even 40 years.  Some are fully amortizing.   Loan to value restrictions are set at an aggressive 80% on purchases and 75% on refinances vs 60% – 65% loan to value on other investment property loans. 

We are seeing more and more borrowers refinancing their existing floating or short term rates into a long fixed rate programs, even if the proposed effective rate is higher than their current program.  Many borrowers feel that inflation could be lurking around the corner and they want to secure relatively low rates now, in case they go up substantially in the future, when the economy finally turns around. 

Apartment Building Loan    

Rates are still good as well, even though margins have with many sources gone up to 50% or more.  The underlying indexes have dropped enough to where borrower’s effective rates are still in the high 5% to low 6%’s (as of this writing 2/09). 

All in all apartment building loans are still viable.  Investors are finding some really interesting deals as well as capitalization rates have gone up pretty much in every market in the country.  Even major markets such as LA or New York have seen drops in asking prices.  Another component of this is that the general outlook for apartment building loans is strong as the government, via Freddie Mac or Fannie Mae back the apartment secondary market and will likely continue to provide the liquidity that many other markets are lacking.     

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Tags: Apartment, Building, Good, Loans, Options, Still

How To Obtain An Apartment Building Loan

If you are looking to obtain financing or a loan for your apartment building – there is critical information you must know about how to obtain an apartment loan before venturing out to get one.

Apartment loans on income producing property are generally available at 80% of the value of the property, or Loan To Value (LTV), or the largest amount dictated by the property’s Debt Service Conversion Ratio (DSCR). The DSCR is similar to the Debt-To-Income Ratio used to qualify a residential home loan. The DSCR determines whether, or not your apartment building will qualify for financing from the lender, or in other words, whether the income will cover the debt.

Properties in only “fair” or “poor” condition may not qualify for apartment loans or will require a larger down payment. Units you’re considering should be in generally good condition and have little deferred maintenance. You may even consider refinancing your current apartment loan to get a lower mortgage rate.

There are many types of financing programs available including: non-recourse loans, apartment mortgage loans, joint venture real estate, commercial equity loans, commercial rehab loans, and structured financing.

Banks, and lenders have different minimum and maximum loan amounts available for borrowing, along with a variety of loan programs for you to choose from, which you should carefully tailor to your specific needs, along with other specific needs such as repayment terms, interest only terms, pre-payment penalties, and the time required to close your loan.

Apartment loans require a lender, or broker experienced in multi family and commercial real estate financing. There are a wide variety of lending options for apartments; small apartment programs for multifamily transactions from Million to Million, mid-balance apartment programs for multifamily transactions from Million to Million, and large apartment programs for multifamily transactions from Million to No Maximum.

Apartment loan carry backs are becoming increasingly popular in today’s environment, as nominal interest rates on apartment loans increase by comparison to the bargain financing available in recent years.

Programs are available on fixed and variable rate financing on 5 or more units as lenders want your apartment loan business and are willing to compete on apartment financing rates and terms to get it.

Of course, terms and rates vary and loan rates currently run as low as 5% while apartment building loan terms can run from 25 to 30 years fixed for apartment buildings and multi family real estate loans.

Apartment lenders all have different requirements for such things such as property type, presentation format, location and quality as well as the minimum and maximum apartment loan amounts they will consider.

Types of Apartment Lenders include: Fannie MAE, Freddie MAC, FHA/HUD and more. While services include in-house processing, underwriting, and the structuring of the most complex funding requests. Also, the right broker can get you access to private lenders, who also do various types of commercial, and apartment loans, including the more creative financing loans that you may need on a particular apartment acquisition.

Additionally, an experienced broker can protect you from the unscrupulous fake lenders out there, who ask you for a large up-front deposit, and then never approve your loan. Their sole business is collecting deposits, and then providing you with a false reason why they could not approve your loan. They then state that your deposit is non-refundable. By this time, it is almost impossible to retrieve your funds, and would be very costly to pursue litigation, which is what most fake lenders who do this are counting on.

However, with any legitimate bank or lender, you will need to provide a small deposit of usually not more than ,500.00. This fee covers the appraisal which the lender will have to order, and the document processing of the loan, which can be very extensive, depending on the size of the apartment you are acquiring, and will usually be credited back towards your final closing cost.

It is also very important to make sure that you do your due diligence as it relates to your financial analysis on the property. Be sure to use the actual net operating income and expenses whenever they are available, as opposed to the projected net operating income and expenses, which is what some sellers will provide to you, in order to make the property appear more enticing to you the buyer.

Loan-to-value percentage rates on refinance and construction are usually in the 75%-90% range. Loan approval will be subject to property appraisal, title review and specific loan program financial requirements. Again, apartment buildings are most frequently financed at 80% of value or cost (whichever is lower) and may or may not require recourse (personal guarantee.

Remember, lenders need to loan you money in order for them to make money, so they are motivated to help you acquire your property. They will work with you to close your loan, but an experienced broker may be able to protect you from possible loss, save you money, and negotiate a better deal on your behalf due to his experience, and previous working relationships with the lenders he brings deals to, because of the volume he may bring to a specific lender. This is an important consideration as you decide to move forward.

In preparing for your new apartment building loan, here are the essential documents that you will need to provide to your lender or broker, in order for them to give you a pre-approval on your apartment loan.

1.) You will need to provide a completed loan application;
2.) You will need to provide a tri-merged credit report. (tri-merged means all 3 credit reporting agencies will be included on the credit report)
3.) You will need the most recent 2 years income and expenses on the apartment building you are looking to acquire; and
4.) You will need the rent roll. The rent roll is just a list of all the present tenants in the building, what units they occupy, and how much monthly rent they pay.

Armed with these documents, you’re ready to get your apartment loan pre-approval within 48 hrs. from the time you provide your broker, or lender with the above listed documents.

Good luck, and make sure you find a knowledgeable mortgage professional to work with you on your acquisition. This will save you time, money, and headaches. It could even keep you from making costly mistakes that could cause you to throw valuable money down the drain.

So, If you are looking to acquire apartment buildings to build your future wealth, and acquire financial freedom, there has never been a better time than now to get started. Take action and prosper!

Tags: Apartment, Building, Loan, Obtain

Moving into a New Apartment has Tons of Great Advantages.

In US there are 18% people make the house hopping or moving through out the year. The statistics virtually do not suggest that how much of stress factors and the hassles are there inclusion of being the expensive means. As per the perfect moving is concern the spring is the best season for relocation to stay from the rain and humidity. Most of the people know that the moving is very stressful as if people have the grief to loose his beloved one or the people or she has been divorced from his or her spouse. Relocation cost is not surprisingly that much higher as you thought of this. It is worth getting the quote the first from a Florida moving companies
For swift and smoother moving with the Moving Companies there are some equilibrium factors to be kept an eye on.

1. Shopping Around- At least shop around for three moving companies. Moving house should send their details to five of the removable companies. Arrangements should be made to set a visit between the Miami moving company and the moving people to allow the person whether he is comfortable with the moving services proposed.

2. Licensed movers- The moving houses have to make sure that they have the licensed mover to furnish the moving stuff for them. The moving company has to make sure that it has been bound by the law of American Moving and Storage Association (AMSA). Unlicensed movers operate from outside of the law and provide with the little protection to the belongings of yours. The authorized moving company will ensure the right kind of moving and packing things. They will make sure that you have the right service at the right point of time.

3. Compare costs- Your moving costs will be calculated by one of two methods: For moves less than 35 miles OR entirely within the counties will be considered as local move. The cost determining factors are- amount of hours worked, liability of insurance, crews or the suppliers needed for the moving. It is strongly recommended to get the moving rate estimate before the move starts.

4. Packing- Most of the Florida moving companies provide with the free moving boxes for the packing the belongings adequately. The moving companies provide with the assorted sized boxes to pack the belongings up especially those are fragile. Many people will pack boxes mark their content and the room they belong on top of the books. Some people will use a notebook to prepare a list of the boxes packed and their content. The notebook may be used later to make the unpacking process easier. It is a great tool to use color coding. Buy color stickers and mark each room in a different color.

When the moving company will deliver the color coded boxes will be easier to recognize and placed in the right room. Many of the furniture purchased today are delivered disassembled and require some assembly. Many times it will mean that those items will have to be disassembling before the move. If you want you can prepare those items for shipping by disassembling those items before the moving company shows up. Make sure you place all disassembled items their parts (screws and other hardware) in a clearly marked box that will be easy to find.

Tags: Advantages, Apartment, Great, Into, Moving, Tons

Tips on Apartment Building and Multi Family Property Loans

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Real estate investment has become an extremely popular way for people to try to make money. Owning an apartment or multi family housing unit can be a way to wealth, however, real estate investing requires a lot of time, knowledge and up-front capital.

Apartment building loans are often offered on two different levels. The first usually requires a minimum loan of $500,000, is a smaller unit, but comprised of no less than five units. The second is for loans over $3,000,000, and is designed for financing much larger units such as large apartment complexes, student housing, or senior or assisted living facilities.

Most lenders will provide financing for units in good condition, and have little deferred maintenance. If the building is in poor condition, you may not qualify for a loan, or have to pay a much higher down payment.

Apartment building loan sources are numerous to say the very least. Before speaking with anyone it’s helpful to have a list of question you may want to ask. For example:

•Is the property fully leased (about 95%)?
•Do you want to borrow more than 80% of today’s value?
•Are you willing to re-finance the property or are you planning on selling in the next 3 years or so?
•Will you accept a loan with a large prepayment penalty?
•Do you expect leasing activity in the building over the next 3 years (either from existing or new tenants) to increase the property value greater than 25%?
•If the property value is increasing more than 25% over the next 3 years, will the loan request today be 75% or less of the increased value?
•Will 50% of the building leases expire in any one of the next 3 years?
•Are you installing land infrastructure, gutting the building or converting the use?
•Is the property value greater than $10 million?

Apartment building financing, or multifamily property financing, is in a constant state of change. As a result, multifamily finance providers must have thorough knowledge and awareness of available debt programs and be prepared to quickly analyze financing options.

Visit Security National Capital today to learn more about apartment building and multi family property loans.

Tags: Apartment, Building, Family, Loans, Multi, Property, Tips

Renting an Apartment After Bankruptcy

OK, so if you’re bankrupt and you absolutely need to rent an apartment here’s what I would do:

• Purchase your FICO credit scores. You’ll see why in a minute.
• Make a list of all the apartments you’re interested in renting.
• Call each apartment complex and interview the apartment manager.

Here are some credit questions to ask:

1. Have you previously rented apartments to people who’ve filed bankruptcy?
2. What are your credit guidelines? (How do I get approved?)
3. Which credit reporting agency do you use to make a rental decision?
4. How important is my credit score in your decision?
5. I purchased my credit scores last week and my FICO scores are [insert your FICO scores here]. How do these scores sound to you?
6. How much do you require for a security deposit?
7. What income do I need in order to qualify for the apartment I’m considering (some agencies will require your monthly gross income to be three times the apartment’s market rate)?

Three other factors that will have a major influence on whether you get accepted or declined are…

1. Whether you have a good rental history. Some apartment complexes will require you have at least 12 months of rental history before they rent to you.
2. That you have no utility collections on your credit reports.
3. And obviously, if you’ve ever been evicted—that sure won’t help you.

So keep these three factors in mind when interviewing for apartments.

What you will quickly learn is that each rental company has their own credit guidelines. Some will require two years after discharge…Others four years…Most will only require you to be discharged. In addition, some will also look to see if you’re on ChexSystems. (If you’ve never heard the term ChexSystems, it means you’re not in it—and that’s a good thing!)

In addition, depending on the season, the number of vacancies, or the general attitude of the property manager, you may have more flexibility than you think.

One thing to look for is a “move-in special.” If an apartment is running a special deal like, “one month free rent if you move in before August,” that usually means that their occupancy rates are low. They may be more willing to work with you.

Also, most apartment complex managers have the ability to override a credit decision if you can show them evidence that you will be able to make your rent payments every month.

The best advice I can give you is to be upfront with the apartment manager. Get answers to the questions I listed above. Interview many apartment managers. And then pick the apartment that works best for you.

Whatever you do during the apartment interviewing process, do not, I repeat, do not allow the apartment manager to pull your credit reports. It’s better if you collect all the facts and take one credit inquiry hit compared to several apartment credit inquiries.

You can minimize credit inquiries by not signing a credit application and/or not giving out your Social Security number.

If the apartment manager is perplexed as to why you refuse to allow them to run your credit, simply explain that you’re trying to keep your FICO credit scores as high as possible by avoiding unnecessary credit inquiries. Each time you sign a rental application you’re giving permission to the apartment complex to review your credit, and credit inquiries lower your credit scores.

And don’t fall for the “you need a co-signer” line. There are other ways to overcome credit guidelines. One way is a larger deposit.

With that said, I still feel there is a better way to rent if you’re unable to purchase right now. Avoid the apartment complexes altogether and rent from an individual landlord or someone who has a house for rent. Major apartment complexes almost always have much stricter guidelines than individual landlords.

Some people have even moved into homes on a “handshake” deal. No credit checks, no outrageous security deposits, no hassles.

Another advantage is a landlord will often look at a credit report you provide him, and not pull one on his own—saving you a credit inquiry on your credit reports.

And when you rent from an individual, as opposed to an apartment complex, there’s more of a human element to it. Who knows? Maybe the person you’re renting from filed bankruptcy a while ago, and will be more understanding of your plight.

Stephen Snyder is the founder of the After Bankruptcy Foundation a non-profit organization that provides free bankruptcy information and recovery steps. Stephen also writes a free weekly newsletter on bankruptcy recovery.

Tags: After, Apartment, Bankruptcy, Renting

Buying an Apartment Building

Thinking about investing in commercial real estate? Why not consider buying an apartment building? An apartment building can be an ideal way to invest in the real estate market today. An apartment building in a good location can earn you a high yield on your real estate investment.

Location is the most important aspect when buying an apartment building. Buying an apartment building in a destroyed area is not a good idea as the renters that you will get may not be able to pay the rent on time, if at all. Apartment rentals are one of the easiest ways to invest in commercial real estate but it can also be very risky.

When buying an apartment building, check out the area and make sure that it has amenities that make it a desirable place in which to live. You also need to make sure the apartment building is structurally sound. An inspection of the property by a qualified real estate inspector is essential. If there are any repairs to be done on the property, it is best to know what and how much it will cost prior to purchase.

You also have to decide who is going to make the repairs on the apartment building. Some investors offer a discounted rental rate to someone who is willing to maintain the building. Most of the problems that are encountered by renters are easily solved with a bit of home maintenance knowledge.

To really save money when buying an apartment building, live in one of the units yourself and rent the others out. This way, you can end up paying off the mortgage on the building as well as having a place to live. Shelter is something we all need and there is no better way to invest in commercial real estate than by living in your investment while paying it off, therefore killing two birds with one stone.

Prior to buying an apartment building you should be well aware of the lease laws in the state in which the property is located. Lease laws vary from state to state but some federal laws regarding fair housing pertain to all states. You cannot discriminate against a renter on the basis of gender, race, religion, ethnicity, sexual preference or family situation. There are certain stipulations to renting to families with children in retirement communities, however. Make sure that you understand the lease laws before buying an apartment building.

Another way to get a real bargain when buying an apartment building is to find one that needs repairs. Because the residential real estate market is so slow, many contractors are looking for work and you can get some bargain rates on general contracting work. As long as the apartment building is located in a desirable location, it can be well worth it to make improvements and add to the value of the home.

Buying an apartment building can be a good way to get started in commercial real estate investing. Be sure to study the location of the building, get a good inspection of the property, examine the existing leases, consider maintenance and be well aware of lease laws prior to investing in rental real estate.

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Tags: Apartment, Building, Buying