Published July 21, 2010
People will always need a place to live. This is a major advantage for people who own apartment properties. Simply put, they never run out of customers because of the importance of having a home. Apartment financing/commercial funding can help you generate and increase your income. Here are some tips to help you acquire good apartment financing/commercial funding:
- Business Name. In applying for a loan, such as an apartment or multifamily loan, make the most out of your business name. Your business name helps you get easily approved. The lender will be looking into the credit score of the company rather than your individual credit score. A business name also adds security to your personal assets, because your personal assets are separated from your business deals. If ever you default on your loan, you will lose the apartment building but not your house and your other personal assets. For those who don’t have a business, you can start off with an LLC or a corporation for the property management of your business.
For those whose businesses are new and do not have credit scores yet, you better create credit. Start a business account with a local merchant. Ensure that they send accurate reports to the credit bureaus. Make a few purchases, as well. Pay off your credit on time. Then observe how your credit rating grows. These measures will help you get approved, as the lender will be taking note if you pay on time, etc. These instances will help them determine if they should lend you money or not.
- Seller Financing. When you have found an apartment to buy, ask the owner whether or not the apartment is open for seller financing. Seller financing is a loan provided by the seller of a property to a purchaser. The purchaser then makes a down payment to the seller. The rest of the payments are done on a monthly installment basis at an agreed interest rate and time.
- Partnership. If you are new to this kind of business, and you don’t have enough financial assets, go get yourself a partner. With a partner who can add his assets for the down payment and has an incredibly high credit score, you can speed up the apartment financing or commercial funding application process. Some lenders are comfortable lending you money if you have an established business partner.
By following the above-mentioned tips, you can obtain good apartment financing or commercial funding for the apartment buildings of your dreams. You’ll definitely be in the apartment business in no time. Once you’re in the business, take good care of your apartments and make your business grow even more!