Los Angeles

Apartment Loans

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Loans for Apartments:

Since April of 2000 Caffrey & Company LLC has been helping real estate investor’s nationwide find the best loan product for commercial real estate investment properties.  Call for great rates for commercial and multifamily properties.  Caffrey & Company LLC has a special focus in providing Los Angeles apartment loans.  The most attractive, non-recourse loan terms start at $1,000,000 for multifamily properties.  Therefore, if you are looking for low interest rates, a non-recourse loan up to 80% of value (Over $5 million leverage up to 83% to 85% is available) you are at the right place.

Multifamily Loan Underwriting:

Each loan product has unique underwriting requirements.  Above all, how the loan data is presented to the lenders can have a negative or positive impact on pricing and loan proceeds.  We offer this expert loan underwriting for Los Angeles apartment loans.  Therefore, this will help to achieve the best pricing and loan terms for your commercial real estate investment.  We encourage our clients to submit key property level data for a free loan underwriting review.  This initial loan underwriting normally takes less than one business day for us to respond with several apartment loan options for you to consider.  Here is a short list of property level data that would aid in providing a loan quote:

Required Underwriting information needed:

  • Last two years and Year-To-Date detailed Profit and Loss statements (in addition a trailing 12-month P&L is best if available) on the apartment complex.
  • Current Rent Roll
  • Brief narrative description of the property.
  • If available a few electronic photos. Or a copy of the real estate agent’s marketing package.
  • What is the purpose of the loan? Acquisition, Refinance, cash out, reposition the property (renovations).

Next we will need to know your objective, how much do you wish to borrower on the apartment complex?  Is this a long term investment or short term investment?  In other words outline your loan request.

We understand the financing of an apartment complex is a very important component of the investment.  Therefore, we encourage our client to send us details on the property before finalizing the purchase and sale contract for an indication of the type of loan that might be available to a particular property.

Fixed Rate Loan Terms are Available for Multifamily Properties:

Loan terms are available from 3-years up to 35-years (40-years for new construction on loans over $5 million).  The Apartment buildings can be Garden Style, High Rise, Age Restricted, Student Housing, Section 8 Tenants and subsidize properties.  There must be at least 5-units.  If you have several buildings all with five or more partment units that you wish to place under one loan no problem, the buildings should be within 3 to 5-miles from the other properties for best loan terms.

How long will it take to close the Loan?

The closing process normally takes between 45 and 55 days to close the loan.  Closing costs vary between loan products.  Before you put any funds out we will provide a detailed estimate of the anticipated closing costs.   At this stage you will know the loan product, the loan terms, and the anticipated closing costs to allow you to make an informed decision before moving forward.

Multifamily market date for Los Angles:

Los Angeles County spent much of the first quarter of 2021 in the most restrictive purple tier of California’s reopening plan. The county’s jobless rate of 11.5% in February 2021 was markedly higher than in many metro areas in the country. However, the recent transition to the less restrictive orange tier should prompt significant economic recovery. Employers in Los Angeles County created or reinstated 212,200 jobs from April 2020 to February 2021. The turnaround was especially notable in the construction and the trade, transportation, and utilities sectors, which in February 2021 had payrolls at 94% of their pre-COVID staffing levels. While many households left the inner core of the metro area seeking lower rent, enough renters desired urban amenities to keep annual apartment absorption positive in the Downtown Los Angeles submarket. Countywide, annual net apartment absorption was negative as 10,354 units were delivered. This supply imbalance fueled a 120-basis-point year-overyear reduction in occupancy to 95.2% in the first quarter of 2021. Meanwhile, monthly effective rent averaged $2,202, down considerably from one year earlier but up 0.2% from the previous quarter.

Northern Los Angeles County, widely considered a bedroom community for the metro area, is also home to numerous major industries, including the world-renowned motion picture industry. According to FilmLA, the pandemic caused the number of local TV and film productions to fall 48% annually in 2020. As the economy reopens, this industry along with many others is
expected to rebound. The county is off to a good start: 247,500 jobs were created or reinstated from April 2020 to March 2021. During that time, rent-burdened households sought relief, and it was often found in the Antelope Valley and the Northridge/Northwest San Fernando Valley submarkets. On an annual basis, Antelope Valley was one of only two submarkets with
rising occupancy and rent. The Northridge/Northwest San Fernando Valley submarket was an even greater draw, and its occupancy rate would have increased had it not been for the emergence of 841 new apartments in the last 12 months. Overall, apartment occupancy in Los Angeles North fell 70 basis points annually to 95.7% in the first quarter of 2021, and effective rent
simultaneously decreased 3.0% to $2,075 per month.

Even amid the pandemic, Los Angeles South remained an attractive option for many renters on a budget. First-quarter average monthly effective rent for the market averaged $1,955, about 12% lower than the countywide average. While annual leasing activity was positive in four submarkets, net negative apartment absorption in two other submarkets fueled a 70-basis-point annual reduction in Los Angeles South occupancy to 96.3% in the first quarter of 2021. A major contributor to this reduction was the pandemic-driven, 10.1% year-over-year decrease in employment through March 2021. Looking forward, new developments bode well for the economy. SoFi Stadium is expected to start filling permanent and temporary positions later this year. In the coming years, new employment drivers will include the new, $1.8 billion Inglewood Basketball and Entertainment Center for the Los Angeles Clippers that is expected to open in late 2024 and the 157-acre, District at South Bay mixed-use development in Carson, which will bring 1.6 million square feet of new commercial space. Multifamily development will help meet future housing demand in Los Angeles South as 4,325 apartment units are scheduled for delivery during the next four quarters.

New and existing apartment renters in Downtown Los Angeles took the long view and looked forward to the eventual reopening of the urban core’s numerous amenities and cultural attractions. Unlike many urban centers in the U.S. that lost renters in the last year, annual net apartment absorption through the first quarter of 2021 was positive in the Downtown Los Angeles submarket. Renters had a wide selection of new apartments as 1,765 units came online in the submarket during the last four quarters. This wave of new apartments and challenging economic conditions generated heightened competition among apartment communities, however, resulting in an 11.3% annual reduction in effective rent. Across Los Angeles West, the 5,447 units that were delivered had a similar effect: effective rent fell 10.4% year over year to $2,526 per month in the first quarter of 2021. Meanwhile, apartment occupancy fell 200 basis points to 93.8%. The pandemic’s harsh impact to the apartment market in Los Angeles West is only temporary, and economic recovery is underway. By March 2021, employers created or reinstated 247,500 jobs from the low point in April 2020.

In conclusion can read about specific loan products. Freddie Mac, Fannie Mae, HUD/FHA, Commercial Mortgage Back Securities (CMBS) and other loan products.  Want more details and sample interest rates for apartment check out Interest Rates for Apartment Loans also on our web site:   Apartment Loan Interest Rates.

Keep Caffrey & Company in mind when searching for a California lender for apartment loans. Have a question please call:  Mike Caffrey (913) 402-7077 or email: Mike@CaffreyLoans.com

On our web site you can read about specific loan products: www.caffreyloans.com/loan-products, offered by Freddie Mac, Fannie Mae, HUD/FHA, Commercial Mortgage Back Securities (CMBS) and other loan products. Want more details on sample interest rates for apartment check out Interest Rates for Apartment Loans also on our web site: www.caffreyloans.com/apartment-loans.

Have a question please contact
Mike Caffrey
Telephone: (913) 402-7077