i am a first time buyer with limited cash. how can i get a loan for over 1.5? i want to buy an apartment compl

iam 23 years old and have no experience in real estate. would that affect me? if its possible to get such a big loan any ideas where i can apply and steps i need to take to successfully archieve that?
In Buying Property - Asked by mary r. - Aug 18, 2009
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Answer(s)

Denise C.
Researcher
Dallas, TX

There are still lenders out there that will work with you. I will give you the name of someone, but I cannot guarantee they will work with you. You must have something in mind, not just pulling a number out of the air. What's the profit margin, etc.. Feel free to contact me.

Aug 18, 2009
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sudersan j.
Broker/Agent
Houston, TX

First of all you want to INVEST. You are thinking right so age is not a factor. Next, experience helps but not the deciding factor. Main thing is your limited cash. If you do not have 30% + for down and the complex is atleast 80% occupied you will be wasting your time. Don't take too much risk in your first venture.
Do not giveup but keep working to get experience. Wish you all the best.

Aug 18, 2009
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Matt D.
Owner/Investor
Franklin, TN

You could also work with an "apartment syndicate" to pool your money with other investors who have both money and experience (don't forget about experience). There are a few folks out there who do this, this is how we operate.
Email matt@sumeffectinvestments.com for more info

Aug 18, 2009
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Nic R.
Owner/Investor
Pocatello, ID

Owner financing and Private lending is a great way to go! Do your homework.
Offer to motivated seller, you'll finance 1/2 down on 1st, they carry back 2nd on other half. Borrow extra for repairs and such.

Aug 19, 2009
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William B.
Broker/Agent
Fort Lauderdale, FL

For conventional loan and for apartments go Fannie Mae. You will need 30% down, reserves for replacements, prrof of funds in accounts, good credit and an overview of your global cash flow (which you may not have - we can go over global cash flow another time but it is essential today). We are doing deals but they are not easy today.
It will be difficult to get financing for your first deal in today's lending markets. They want to lend to established, experienced investors with an operating history and other assets in the market and lend on strong properties. Again, lots of deals but you must be a strong sponsor.
I agree with below - find a motivated seller with no debt and buy it with seller financing. Get a good, strong property, get seller financing for a few years and refi out after that.

Aug 19, 2009
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Paul S.
Broker/Agent
Glendora, CA

Why start so high? When talking over 4 units you are in the commercial loan world. Lenders have much different requirements, none of which are low down payments. You will encounter minimum 35% down and a debt service ratio (DSR) of at least 1.25, whichever is greater. Think about starting smaller, under 4 units? The loans for residential 1-4 units is considered "conforming" and offer the lowest interest rates and the lowest down payments. You will not have to deal with a DSR. The lender will qualify you by discounting the income by 25%. If that produces a negative cash flow, and you personally can qualify for the negative, you can still get the loan. A commercial loan that would not be possible because of the DSR would be under 1 if the property produces a negative. A 1.25 DSR simply means that for every dollar of debt service you need $1.25 in income. In many cases the loan amount will need to be reduced to meet that requirement. Keep in mind that there is a minimum down (usually 35%) and the DSR whichever is greater. If 35% down produces a DCR of 1.1 you will need to put more down than 35%. By the same token if 35% down produces a 1.4 DSR you will still need 35% down. With residential income 1-4 you avoid all of that. You will also be able to get 30 year financing which you will not be able to do with a commercial loan. You might be able to find seller financing with little down. Be careful with that one. Ask yourself why would someone be willing to do that? There are some good reasons but many bad ones.
Paul Sylvester, CCIM

Aug 21, 2009
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Tai L.
Broker/Agent
San Diego, CA

What area are you looking for? Unlike residential, where the investor/buyer gets pre-approved first. For commercial, lenders will also weigh in on the performance of the building.

Aug 23, 2009
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Gregory G.
Broker/Agent
San Francisco, CA

Are you going after SBA financing? Is that why the 1.5 million?
http://www.gregorygarver.com

Sep 1, 2009
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