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 a Minneapolis apartment loan. 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 a Minneapolis apartment loan. 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, re-position 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 apartment 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.
Market for Multifamily in Minneapolis, Twin Cities:
Roughly 2,800 apartments were finalized during the third quarter, slightly outpacing the total in the first half of the year. Builders also have 15,400 rentals underway with deliveries scheduled into 2023 and roughly 4,100 are in urban locations. Robust deliveries amid higher unemployment moved the quarterly vacancy rate up 10 basis points to 3.8 percent in September. The highest rate since 2016. On an annual basis, the rate is up 100 basis points but still remains among the 11 tightest of major U.S. markets. The rise in vacancy dampened rent growth.
Effective Rents for Minneapolis and St. Paul:
Following a 1.0 percent quarterly gain to a new high in March, the effective rent has receded 0.8 percent since then to an average of $1,361 per month in September. Class A rent retreated 1.9 percent in the third quarter to $1,762 per month on average. Trading volume rose slightly in the third quarter but remains well below the year ago period. It was mainly local investors who were active, focusing on Class B/C suburban assets. Over the past 12 months ending in September, the average sale price soared 11 percent to a new high of $149,000 per unit, while the average cap rate held in the high-5 percent span.
Capital Markets for the Twin Cities:
Record-low interest rates to encourage investment activity. Freddie Mac and Fannie Mae are originating loans in the high-2 to low-3 percent range for gateway and secondary markets, while interest rates in smaller markets can reach the mid-3 percent band for well-capitalized buyers. Life insurance companies are offering rates in the 3 to 4 percent range with LTVs of 60 to 70 percent, though some premier properties have been able to achieve rates in the mid- to high-2 percent band. Most banks, credit unions and CMBS lenders are offering debt in the 3.25 to 4.25 percent range, and debt funds start slightly higher in the 3.5 to 4 percent territory. Stricter criteria for CMBS loans have limited options for many borrowers though. The Federal Reserve’s commitment to keep the overnight rate near zero through 2023 should support historical low interest rates over the coming quarters, providing investors with compelling risk-adjusted returns in contrast with other asset classes.
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.
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.