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Multifamily loan rates and Commercial loans

Commercial Loan Blog

May 22, 2014

At Apartment Loan Store, we are often asked by our clients about apartment loan qualifications. Keep in mind that owning an apartment building is like owning a business. There are seven apartment loan qualifications that an investor seeking a loan needs to meet today. 
 

Apartment Loan Qualifications:
 

  • Net Operating Income – Does the apartment complex have positive net operating cash flow to support the loan payments on your desired loan? Preferably at a 1.25 debt service coverage ratio (DCR)? Start by looking at the last full year profit and... more
  • May 21, 2014

    Doing due diligence on multifamily lenders for multifamily loans has been a topic of this blog a number of times. Today, we are going to look at a very good way to help you do due diligence in your quest for apartment lenders.

    Why? Like anything else in business, you want a company you can trust to do the job you are paying for. And as in anything else, service runs the gamut between superior multifamily lenders and bad multifamily lenders.

    Choosing a superior multifamily lender to do your apartment loan can result in a wonderful, profitable experience.... more

    May 15, 2014

    We have all been educated that shopping for a mortgage and getting lenders to compete against each other is smart business. How many lenders do you know or trust? A mortgage broker will know many more than you. This is just one reason for using mortgage brokers. You probably know of a few banks, but do you know their lending criteria? An experienced mortgage broker will know which lenders will get your deal done. Mortgage brokers will also package you and your loan in a proposal that gives you the highest chances of approval. If there is a weakness in your loan a good... more

    May 13, 2014

    Apartment property management is a very important part of owning a multifamily property. It is not an easy part of it, however, whether you manage your own property or hire professional management.

    It is a business in and of itself. So if you are new to multifamily investment and have no experience in real-estate property management, think twice about doing your own property management. You need to be skilled in screening applicants, good at handling uncooperative tenants, and know bookkeeping. There are so many stories of properties that failed because of poor... more

    May 12, 2014

    A commercial lender makes loans to commercial real estate investors or to a business, but not to an individual. Loans made to individuals are called consumer loans. Real estate loans made to individuals for one to four residential units are consumer loans called residential loans. Commercial lenders usually make loans on properties with five units or more. In most cases, commercial lenders make loans to properties that are zoned commercial.

    Commercial lenders are, foremost, making the loan to an income stream from an investment property or business to service the... more

    May 6, 2014

    Quite a few commercial loan investors will, in time, come across the idea of getting a bridge loan or hard money loan. In this article we will focus on bridge and hard money apartment loans.

    An important question to ask yourself is, “Should I get into bridge and hard money apartment financing?”

    First, you need to be sure you know what bridge and hard money apartment financing is used for. Here are some reasons people get bridge and hard money apartment financing:

  • A property doesn’t cash flow enough to qualify for a loan because the occupancy is too... more
  • April 30, 2014

    People who are new to real estate investment sometimes find themselves stumped by which type of investment to start out with. Commercial or residential? Keep in mind that an apartment complex (commercial property) is defined as five units and above. Four or fewer units is considered a residential property.

    We recommend that you start with a residential investment, unless you have a large amount of money to invest and you work with an experienced partner. Why should you do this instead of going with an apartment purchase and multifamily loan?

    ... more

    April 29, 2014

    Hard money lenders make temporary loans, or bridge loans, with high interest rates and loan origination points. Most hard money lenders charge interest rates averaging 10.00% to 14.00%. Points can average between 3.00% and 10.00%. At Apartment Loan Store, we offer hard money bridge loans starting at 6.00%.

    So why would someone want to use a hard money lender? Here are seven reasons why:

  • Borrower Needs to Close Quickly – Hard money lenders can close in as little as a week, and average 14 to 30 days. Sometimes an appraisal is not needed if the lender uses... more
  • April 22, 2014

    In last week’s post, “Customer Service for Apartment Loans,” we covered examples of poor customer service when it comes to multifamily financing, which also applies to any type of commercial loan. This week, we give you 10 examples of excellent customer service from multifamily lenders – the types of things you should look for in getting your multifamily loan.

    10 Examples of Excellent Customer Service from Multifamily Lenders:

  • Your multifamily lender returns calls promptly—within an hour to a few hours is very good. Weekends would be an exception. Most... more
  • 7 Key Components Needed for a Commercial Construction Loan to Work

     

    1. An Experienced Development Team – When I first started lending on commercial construction projects over 20 years ago, it was so much easier to get a commercial construction loan. These loans were made primarily to the quality of the project and the development team – we are talking about the developer, architect, general contractor and property manager’s experience. This gave the lender a cozy feeling that the construction would be completed on time and at budget. Today the lender will... more

    April 18, 2014

    If you plan to keep your apartment building for a long time, and are looking for a long-term fixed-rate mortgage, we will direct you to Fannie Mae, Freddie Mac, HUD/FHA, Insurance Life Companies, and Commercial Mortgage Backed Security (CMBS) loans. These rates can be fixed from 10 to 35 years and have terms (loan matures) of the same duration. A HUD loan has a 35-year fixed rate lower than most commercial banks’ five-year fixed rates—and yes, it is fully amortizing (has a 35-year amortization). If you plan to keep your property for life and pass it on to your kids,... more

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