Multifamily Financing: Financing The Deal with Seasoning

Trying to obtain multifamily acquisition financing today with 15% equity?  Go to HUD or have a deal size above $20 Million Dollars.   For everyone else its wait,  look and listen.   Many lenders continue to be in hiding with “continued uncertainty” as their mantra.   How do you get a deal financed today?   Look for seasoning- well seasoned mortgage bankers that know their stuff.  No rookies.  No “just graduated”.  Work with professionals.  

Today’s blog  is not a discussion about due diligence and operator experience.   When searching for financing today there are no short-cuts.  Loan-to-value (LTV) ratios are tighter than anytime in the past ten years.  Now, this is not necessarily a bad thing for a future healthy multifamily market.  However,  it is a big adjustment on all sides of the table (for lenders, buyers, sellers) as we all adjust to “normal” underwriting (i.e., doing deals that make sense to everyone, including lenders and operators and not just third-party fee earners).   We should all feel sorry for commercial appraisers today.  How do they get their job done in this marketplace?   

Where do you find the professionals?  Who are they and where do they live?  Usually, they are in your very own backyard.  Whereas I’m dying to mention names here I’m going to take the high road and discuss a funnel approach  for identifying people that know what they are doing.   But first let me state this: you have to be real.  There is no value in chasing financing unless you as a borrower and  the deal have legs (meaning the ability to stand).  Everyone has been around the guy at the party that seems to like talking just to hear himself talk.  Don’t be that person.   If you have a deal and a reasonable opportunity to close on it then by all means go after it.  If its all hype save your breath and every one’s time and move on to a deal you can do.   

For deals under $2,000,000l lender is best; a local or regional bank.   Often this will extend to deals under $5,000,000.  They have average unit sales prices in their head.  They know all the local third-party service providers.  Once the loan amount exceeds $5,000,000 there is another world that opens in terms of financing.   National and international banks, pension funds, private banks, funds and funds of funds, insurance companies and on and on.  However, unless you have relationships established within one of these networks you will need “representation” to gain access.   Meaning a seasoned mortgage banker.   It’s best to have a mortgage banker already on your team prior to an acquisition candidate in your sights.  

Let’s assume you know not one single solitary soul in the mortgage banking business.   No one at all.   Where do you find a banker?  A real banker?  Start with the Mortgage Bankers Association and focus on commercial bankers (  Then identify those that work with your product type (multifamily) and those that have offices in your region of the country.  Surf their websites and check out individual bankers.  Look for one or two that have credentials (in terms of years of experience, experience in your product type and volume) and also to see if there are any “links” you can develop.  Links include things that you and the banker may have in common.  Perhaps you went to the same college or both worked for the same entity sometime back.  An example is that their profile says they’ve closed  $100 million dollars in loans in the last few years and their favorite team is the Orioles.   Perhaps you have a rookie card from the best Oriole player ever.  Call and brag!  You understand my point.  Find links and start a conversation. 

Another place to look is within the National Associaition of Mortgage bankers  If you want to see who is doing volume,  peek at some deal structures at Crittenden .  

Keep networking.  Find personal links.  Identify deals that work and do your homework.     


About This Blog
Multifamily Insight is dedicated to assisting current and future multifamily property owners, operators and investors in executing specific tasks that allow multifamily assets to operate at their highest level of efficiency. We discuss real world issues in multifamily property management and acquisitions. This blog is intended to be informational only and does not provide legal, financial or accounting advice. Seek professional counsel.  For more information, visit:


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