Received this question from one of my seminar attendees:
Q: When do I start the financing process on a multifamily property?
A: Though the Purchase and Sale Agreement clearly defines when the multifamily financing period ends, it is silent as to when it should begin.
That’s because it should start RIGHT NOW. Even if you do not have a property under contract or you have not even made any offers,
you need to know what it is going to take to get that deal financed – that is true whether you are birddogging, wholesaling or syndicating the deal.
Here’s why….
When you are analyzing the deal, you need to know what financing terms you will have to input into your spreadsheet in order to have the program
spit out the most accurate cash-on-cash return numbers. What if you are looking at a 20-unit Class C property? What amortization should you use?
type of lender would lend on that type of property and what interest rate are they quoting right now? Every property is different and you will need to
know the parameters for each.
It’s not hard to do and it is something that needs to be done when you are in this business. So don’t wait until you hav ecompleted the property
inspection to start the process like some investors do. START TODAY!!
Good Luck.
