What to Consider when Investing in a Multifamily Property and your First Commercial Mortgage

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What to Consider when Investing in a Multifamily Property and your First Commercial Mortgage

Untitled-1So you’ve taken the plunge and now have your first apartment complex under your belt. You may feel a little overwhelmed or eager to dive in with both arms overhead. Either way, there are some important decisions you are going to have to make regarding occupancy, rent price, operations, and commercial mortgages. If purchased and managed correctly, this type of property can get you positive cash flow right from the beginning.

The first step and one you’ve already done, hopefully, before purchasing this property is to get to know the area and the market. Check out what other apartment buildings are going for in the neighborhood and what amenities they provide. If you find a comparable one, note them and keep an eye on their rent pricing. It could be that the seller had grown a little despondent toward the end of their ownership and let rents go untouched for years. Of course, if you have an awesome tenant, not raising their rent can be a good strategy. However, increasing the rent by just $25 can add thousands to your bottom line at year’s end.

Take a look at vendor and maintenance costs. Is the landscaping company charging comparable prices or are they out-pricing their competitors? Do the gardeners spend about 15 minutes on your property for hundreds of dollars? Take a good look and determine if there is some money to be saved in this area. The same holds true for maintenance and cleaning companies that come in after a tenant has left. Can your deposits be increased without affecting occupancy?

The Right Texas Commercial Mortgage can Provide you with the Leverage you Need

Leverage is important in Texas Commercial Real Estate investing. The less money you have to put down on each property, the more properties you can add to your portfolio. Your goal is to create a cash flow from each property that will pay for most of the monthly debt service. If you choose the right neighborhoods, buy at the right time and look down the road for at least 10 years, the properties you invest in will appreciate in the long run. It’s apparent that finding the right Texas Commercial Mortgage is a crucial component to multifamily property success. A private hard money loan is an asset-based loan. This means that the most important underwriting component is the as-is value of the property. They often require no minimum credit scores and, if this is your first multifamily loan, can work with you to help fund your project. You will require a budget and an exit strategy.

A private hard money lender offers quick capital for Texas Commercial Real Estate investors.

At Level 4 Funding, we work with hundreds of individual private hard money lenders. We know those that are interested in providing Texas Commercial Mortgages for multifamily projects and the ones that prefer single-family dwellings. We offer short-term loans that can be extended up to five years. If you have heard “no” from a bank, give us a call. You may very well hear a resounding “Yes”!

Dennis Dahlberg
Broker/RI/CEO/MLO
Level 4 Funding LLC  Private Hard Money Lender
Arizona Tel:  (623) 582-4444
Texas Tel:      (512) 516-1177
Dennis@level4funding.com NMLS 1057378 | AZMB 0923961 | MLO 1057378
22601 N 19th Ave Suite 112 | Phoenix | AZ | 85027
111 Congress Ave |Austin | Texas | 78701
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About the Author:  Dennis has been working in the real estate industry in some capacity for the last 40 years. He purchased his first property when he was just 18 years old. He quickly learned about the amazing investment opportunities provided by trust deed investing and hard money loans. His desire to help others make money in real estate investing led him to specialize in alternative funding for real estate investors who may have trouble getting a traditional bank loan. Dennis is passionate about alternative funding sources and sharing his knowledge with others to help make their dreams come true. Dennis has been married to his wonderful wife for 42 years. They have 2 beautiful daughters 5 amazing grandchildren. Dennis has been an Arizona resident for the past 40 years.

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