Multifamily Loans For Commercial Real Estate Developers
Like the residential side of the industry, commercial real estate offers the entrepreneur and investor many opportunities for a successful business. With a dedicated work ethic and expert knowledge, you can achieve your goals and make an excellent career for yourself. One area in commercial real estate to consider is investing in multifamily properties. The challenge is getting started. Most people getting into the business will need a little help with their first investment. Once you’ve gotten a few properties under your belt and stat to make money, you should be able to pay for subsequent properties with cash. However, obtaining multifamily loans initially is vital to getting off on the right foot.
Have Your Credit in Order
Anyone who has ever had to qualify for a loan of any sort knows how important the credit score is. For some, the credit check is filled with anxiety, and if your score is on the lower end—meaning in the 600s or below—there’s good reason to be nervous. To obtain multifamily loans you need a score in the 700s, preferably. To be on the safe side, your best bet is to get your credit score up to 740. Doing so will ensure you secure a favorable rate and terms. Scores lower than this will make qualifying tougher to come by.
Have a Down Payment Ready
If you’re a commercial real estate developer, and you want to qualify for multifamily loans, it’s vital that you have a nice chunk of money to put down. A down payment of at least 20 percent of the purchase price will be required for a conventional loan. This is because no mortgage insurance will be included with the loan. Ideally, you’ll be able to put down 25 percent or more. This will increase the likelihood that you will qualify for the loan you want. If you are having a difficult time coming up with the necessary funds for a down payment, you might need to put off your first investment.
Look Beyond the Bank
When you think about getting multifamily loans you may think exclusively of a large bank. However, there are other options that may be a better fit for you and your needs. Alternative lending options such as hard money loans, private lenders and online lenders will have higher rates. On the bright side, though, these lending options won’t require as high a credit score.
Secure your funding today for your first investment property. You’ll be on your way to a satisfying career.