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What counts as an "Apartment Building?" In Baltimore County, a typical apartment building contains 7 units. Having at least 7 exempts you from registering the property as a rental property. Also, look at each unit. To count as an apartment building, each unit should have a kitchen, bathroom, and a sleeping/living area. (studio, 1BR,2BR, etc.)
What does the ideal investor look like for an apartment building of 5+ units? The ideal investor should have enough cash or assets to put down 20-25% of the purchase price and at least another 10% of the total loan amount in assets or cash. If you are looking to buy an apartment building for the first time and you are planning to use hard money, equity, or mezzanine debt, I would seriously advise against. The deal might be too big for you.
What are the government-backed apartment building loans available? – The government provides several loan programs for multi-family lenders through HUD and other quasi family lenders such as Fannie Mae and Freddie Mac. Depending on the size of the deal, many states have their own loan programs through the bond markets or Low Income Housing Tax Credit programs.
What is a bank balance sheet loan? – A bank balance sheet loan simply means the bank is not going to sell the loan it gives you to the secondary market. They may hire a third-party to service the loan but they will keep the loan on their books. Typically, if a bank does not sell their loans they will also service it. Typically, these are local or regional banks.
Are there any short-term financing options for apartment buildings? The only short-term options maybe through hard money or equity channels. There maybe also be bridge loans available to bridge the gap between acquisition, construction, and placement of permanent debt on an apartment building. But again, these bridge loans are for bigger deals.
Ernie Rafailides
What does the ideal investor look like for an apartment building of 5+ units? The ideal investor should have enough cash or assets to put down 20-25% of the purchase price and at least another 10% of the total loan amount in assets or cash. If you are looking to buy an apartment building for the first time and you are planning to use hard money, equity, or mezzanine debt, I would seriously advise against. The deal might be too big for you.
What are the government-backed apartment building loans available? – The government provides several loan programs for multi-family lenders through HUD and other quasi family lenders such as Fannie Mae and Freddie Mac. Depending on the size of the deal, many states have their own loan programs through the bond markets or Low Income Housing Tax Credit programs.
What is a bank balance sheet loan? – A bank balance sheet loan simply means the bank is not going to sell the loan it gives you to the secondary market. They may hire a third-party to service the loan but they will keep the loan on their books. Typically, if a bank does not sell their loans they will also service it. Typically, these are local or regional banks.
Are there any short-term financing options for apartment buildings? The only short-term options maybe through hard money or equity channels. There maybe also be bridge loans available to bridge the gap between acquisition, construction, and placement of permanent debt on an apartment building. But again, these bridge loans are for bigger deals.
Ernie Rafailides
