What Do Long Beach Real Estate Investors Need to Know about Multifamily Financing Today?

The current real estate situation has presented a lot of challenges for investors, but there are also a lot of opportunities. Those who are flexible and able to pivot according to shifts and unexpected trends are going to be just fine – regardless of what’s happening in the world or the economy.

If you’re thinking about investing in multifamily properties, you’re making a smart move. However, there are a few things you need to know about financing that investment. It’s not as easy as it once was.

Multi-Unit Property Financing: Gather Your Reserves

For starters, lenders are going to want to know that you are financially stable before they’re willing to approve a multi-family loan. Not only do they want to see a least a year’s worth of reserves, they want to keep those reserves in the bank. The pandemic has created an uncertain environment in every industry, including banking.

Make sure you can prove you have the money you’ll need to make your payments and protect your property. Not a single financial institution wants to hear that owners don’t have the money to pay their mortgage or meet their responsibilities. It’s up to you to ensure your lender feels like you’re a good credit risk.

Can You Handle Late or Missing Rent Payments?

You’ll need to have enough reserves because tenants are struggling in this shifting economy. Things change every day. The original stimulus package that was passed earlier this year was successful in keeping people on their feet. A lot of tenants are hoping for another stimulus payment, and in many cases their rent payments depend on it.

If you’re going to invest in multifamily properties, your lenders understand that rental income is precarious right now. Tenants are not only struggling, they also have a lot of rights, especially in California. Your lender will want to be sure you can cover any missing rental payments that might affect your investment income.

Work with Property Managers Who Specialize in Multifamily Homes

Whether you need referrals for financing or help ensuring rent is collected on time every month, work with a Long Beach property management company that can help you identify the right investment opportunities, get financed for the acquisitions you want, and have a successful rental and investment experience. You’ll need help with fair housing compliance, tenant communication, and all the new rent control and just cause eviction laws that have taken hold in California.

If you’re not up to date on all the legal requirements and financial requirements, you’re going to lose money on your investment. Banks know it.

You’ll need to be flexible, patient, and smart. You’ll need to be prepared and able to pivot given whatever circumstances show up next. This is not the time for analysis paralysis and wasting time.

If you’d like some professional help with multi-unit property financing or multi-unit property management, contact us at CMC Realty. We have implemented some great tools and technology that allows us to manage homes effectively, even during this unprecedented pandemic. We’d be happy to talk about your unique situation.