Commercial Apartment Financing and Underwriting

Each time I speak with a relative in France who is in banking, I am reminded how lucky we are in this country with our financial system. Even in times of crisis, the availibility of funds is greater than in most countries in the world. The trick is to use these funds to do the right investments.

Commercial Apartment Financing is the first type of property that we will be looking at. These types of properties are very comon and in general good investments for buyers. I am referring here, to building with more than 4 units. Up to 4 units, these buildings are considered residential properties and will be subject to residential guidelines. In this post, we will go over the process and time line next post will go over the numbers.

Here is the process either for Refinancing and/or Buying:

Day 1: Loan Application Received by Broker/Bank
Day 2: Initial Review
Day 7: Initial Review completed Bank / Broker express interest
Day 8: Terms and Condition offered to Borrower
Day 9: Terms Accepted additional documentation provided by borrower
Day 13: Conditional Approval Issued subject to Appraisal
Day 14: Appraisal Ordered by Funding entity
Day 30: Appraisal Received
Day 40: Final Approval issued
Day 46: Documents Drawn
Day 47: Documents Signed
Day 50: Loan Funded
Day 51: Loan Recorded

As usual this is only an estimated timeline, subject to changes based on the bank and the time of the year etc... In general a Hard Money lender can fund these types of loan much faster from 10 days to 30 days depending on the specifics. I am seeing and doing this regularly and numerous investors are using hard money lenders because they need short term financing and no prepay.