June 25, 2014
The answer is that it depends. We find that a good number of people have great difficulties in getting apartment loans in other states – that is because so many apartment investors don’t qualify for a multifamily loan in another state. On the other hand there are individuals who do qualify and can get an apartment loan in another state.
The key word is experience. Furthermore, it’s having experience in the area of that state outside of where you live – that you own a number of successfully run multifamily properties in that area. Thus a commercial loan professional will see that you already are experienced in the area and will know that you are familiar with investing in that area.
If you don’t have experience in ownership in that state, not only is it typically very difficult to get a loan there, but if you do manage to get such a loan, it is very possible that it will not be as good of a loan as what you would get in the state you live in. This is because you are a higher risk.
A major concern that lenders have is that it can be quite difficult to manage a property that is very far from where you live. There have been many investors who have lost their apartment complex when they live far from the area of residency. The ability to inspect the many things that can go wrong is weakened from the great distance.
An exception to there being difficulty in getting an apartment loan in another state is if you own a property in an area of another state that is very close to where you live. An example is someone who lives on one side of a river who gets an apartment loan on the other side of a river that is in a different state.
Feel free to call or email me if you have questions concerning getting apartment loans in another state or any other questions concerning apartment loans or other types of commercial loans. I can be reached at 214-695-7310 and firstname.lastname@example.org
Bruce Painter, Director of Marketing, Business Loan Store