36 unit apartment building loan

Board Topic: financing a 36 unit apt. complex
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financing a 36 unit apt. complex

Posted by: Guest_sandeja16 Dec 2 2004, 10:14 AM
I have an equity partner willing to lend me X amount of dollars at a very favorable rate. What are the the pros and cons of putting down 25% as apposed to 30% on a 36 unit building (this will be my first building). If I were to put down 25 % I could leverage the money over this 36 unit as well as a smaller 8 - 12 unit building. Let me know if you need more info.

Thanks

Posted by: loanuniverse Dec 2 2004, 01:12 PM
Sandeja:

You answered your own question. Using leverage allows you to acquire more properties. As long as the return on the investment is higher than the cost of financing, it pays to use leverage.

It is all about cash flow.

Posted by: Commercial Lender Dec 3 2004, 03:43 PM
Depending on the loan amount i would reco putting down 25% and saving the rest for either closing costs or cash reserves (If you go full doc, depending on the structuring, one of the req may be cash reserves)
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