Hello, this is Shuo. So how to be qualified for multifamily loans?
Three top requirements:
- Net worth. So the cumulative net worth of the key principles in the general partnerships need to be greater or equal to the loan amount.
- Liquidity. Same group, the key principles’ post-closing liquidity [has] to be equal greater than at least 10% of the loan amount.
- The KP – same key principles – have experiences with the lender or with a business plan.
However, meeting the above requirements one team can be pre-qualified for the loans but not be pre-approved, because there’s so many details that are deal-specific and needs to be further fleshed out in underwriting.
That’s why multifamily syndication is a team sport. And as a passive investor, one may not have the net worth, liquidity, or work experiences, but still can enjoy the return and tax benefits from the investment.
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Patrick Grimes is a design engineer and CEO and Founder of Invest on Main Street, LLC. His real estate holdings include general partner ownership of a multifamily and single-family real estate portfolio valued over $146M, including 1,950+ units across the southeastern United States and Texas.
He has been active in real estate investment since 2007, including purchasing land and distressed assets, renovating them, and stabilizing them for long-term cash flow. To scale his real estate portfolio, Patrick moved from single-family to multifamily investing and founded Invest on Main Street, a private equity firm specializing in multifamily value-add projects in emerging markets.