Old Capital Real Estate Investing Podcast With Michael Becker & Paul Peebles

Michael discusses what lenders are looking for when applying for financing on an apartment transaction.  With apartment lending- the quality, condition and location of the asset are the most important factors in underwriting. A PRE-APPROVAL is not going to be available because 2/3rds of an apartment lending decision is based on subject property. The lender needs to have a complete picture on a number of critical underwriting variables. Examples: Where is property located and age? What are historical cash flows for the last 2 years and year to date? How much deferred maintenance does the property currently have and what is rehab budget necessary to cure? Who is going to manage the property? What does your monthly proforma show; what is your future expected operating expenses and total income?  1/3 of an apartment lending decision is based on you. What is your liquidity? What is your net worth? What is your past apartment experience and level of ownership or management? Do you receive consistent personal income