Investor Tips

Qualifying for a Loan – In general, if you are going to apply for a loan for a multifamily property, there are a couple of requirements that most Lenders will look for:

  1. Your net worth must be at least equal to the loan amount you are seeking.
  2. You must have at least 10% of the loan amount in readily-available funds (post-closing liquidity) to cover any shortgages in cash flow or unanticipated expenses.
  3. You must have prior multifamily experience.

If the above criteria cannot be met, there are things that can be done. The biggest is to partner with a Key Principal (KP). A Key Principal is usually a high net worth individual or individuals that can put up their balance sheet to help you meet the net worth and liquidity AND the experience requirements. Obviously, if you do not qualify for financing on your own, a Key Principal is essential and you must find such a person way before you need him or her. To see how a Lender will look at your net worth, download and complete our personal financial statement (PFS). We would be happy to review it with you to determine for what size loan you may qualify.

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