HOW TO FINANCE
AN APARTMENT BUILDING (5+ UNITS)
Up until now, I’ve been sharing insights on financing 1–4-unit properties and condos. But when it comes to apartment buildings (5 units or more), the rules change—these loans fall under the domain of commercial banks.
Unlike residential loans, commercial loans are based on the rental income a building produces. Every bank uses its own formulas and has unique borrower/property requirements.
One lender we work closely with is East West Bank. Thanks to our special partnership, if they can’t fund a deal, they refer it to us—and we get it closed with another bank.
At a recent in-office presentation, Bonnie Huynh and Otto Tank introduced a unique program:
✔️ Fixed interest rate for 18 months
✔️ If market rates drop, the bank will adjust and lower your rate
✔️ Other important details include prepayment penalties and the 10% deposit rule (e.g., $1M loan = $100K deposit requirement)
Good news: We also work with lenders who don’t require that deposit.
Have questions? Call me anytime: (415) 225-7920
Let’s find the right loan for your building! I promise to help!
Manny Kagan,
President,
Pacific Bay Financial Corporation
Your professional mortgage broker since 1983
NMLS #205637
DRE #00874630