How to Make Your Apartment Building Loan Application More Attractive

There are several ways you can make your apartment building loan application more attractive. The trick is in the supporting documentation.

All lenders will require certain documents accompany the apartment building loan application.

They are the following:

Personal Financial Statement

This statement shows your assets, liabilities, and resolves them to show net worth. It also shows the portion of your net worth that is cash or cash or cash equivalent. Things like checking and savings accounts, CD's, and most stock and retirement accounts. These are things that can be converted to cash quickly, hence the term liquid. A "liquid" borrower means they have a high ratio of cash to net worth. A highly liquid borrower will have a better chance of getting a loan on their apartment building, so when filling out your loan application make sure to highlight all the cash and cash equivalent accounts you might have.

Rent Roll and Expense Statement

This report shows the income and expenses from your apartment building. Net income is a key underwriting factor for lenders, and determined by subtracting the expenses, vacancy, and other collection losses from the rental and lease income amounts. The higher the net income the better you'll be. Some landlords typically leave out income they might receive from laundry or renting storage space because they get that money in cash. To cast your apartment loan application in a better light make sure to include all those ancillary forms of income as they will raise the net operating income of the apartment, making it more valuable and a better candidate for a loan.

Lease Agreements

Lenders like to see long lease agreements guaranteeing the property will enjoy solid net operating income for many years. If your leases are month to month you might consider going back to your tenants and asking them to commit to a longer lease, six months or even a year. Also, lenders like to see the property has been stabilized for some time. If your building has enjoyed high occupancy rates remember to include previous year's rent rolls with your application. This will show the lender there hasn't been much turnover in the past which will lead them to believe the apartment is a safe investment for the future.

Color Pictures and Maps

This will not usually affect underwriting, but if you can show your property's proximity to local and regional services you will be able to convince the lender your apartment might be a better investment than another property on which they are considering lending. If you are close to light rail, or commuter lines, libraries, city services, or a regional shopping mall, these are all things that might help keep your building occupied.

Take the meeting

In today's technological age we tend to lean too much on the internet, especially for banking and business operations. Another way to make your apartment building application look better is to meet with your lender in person and to invite them to visit your property. This will only work if you're using a local lender as opposed to a lender who is on the other side of the country. If your lender visits your property and likes what he or she she's they will be more investing in making that loan. Make sure the property is as clean as possible, and try to fix any deferred maintenance issues ahead of time. Making a good impression with your lender is important.

Follow these easy steps and your apartment building loan application will be an attractive proposal to any lender.