Financing A 2 Million Dollar Property
Hello,
I have a financing question:
I am looking at a 2 million dollar apartment complex of 40+ units. If I can come up with $300,000, will a lending institution loan me the other 85% ? Based on the property income and not on mine ?
thanks all !
jared
It really depends on the cash flow and your credit score. I know of some that would seriously consider it depending on the actual appraisal.
Messiah,
And I thought I had a tough user name to live up to.
Jared,
Assuming your personal financial statement and credit score are not horrific yes, it is possible. Most commercial lenders would like to see at most 80% LTV-- you might see if you could get the seller to take back a second for say $200,000 which would bring the 1st mortgage share to 75% LTV and open a bigger universe of possible lenders.
More important may be the Debt Coverage Ratio, however. Most lenders want to see your debt after all expenses except the mortgage exceed the mortgage payment by a factor of at least 1.2 and preferably 1.25.
Thanks all for your advice and information. I truly appreciate it. I am looking for lenders now. Is it better to get the lender lined up first or to do the due diligence on the property first ??
Or both simultaneously ??
Thanks !!
jared
Both simultaneously and both after you have the property under contract.
If you have a strong financial statement go through both the due diligence and the financing at the same time.
If your're like me with a shaky financial statement, you better line up financing or you'll be wasting your time doing anything else.