Royal Capital Group specializes in providing competitive financing for multifamily and apartment loan requests for income producing properties with 5 units or more across the USA. Typically this category of financing requires stabilized income within the last 90 – 120 days of property ownership on either the select multifamily property types or apartment building.
Eligible property types will includes:
– Multifamily
– Apartments
– Manufactured home communities
– Mobile Home Parks
– Assisted living communities or buildings
– Mixed use properties (no more than 30% is dedicated to other commercial use). If this is the case then refer to commercial lending page
If the property you seek to refinance or purchase has not had a stable cash flow for the last 90 – 120 days, then bridge financing will be the best solution for your multifamily loan request. Please click here
Please contact us for a phone consultation at 786 269 4744 or send your inquiry to Info@royalcapitalgroup.com
Apartment Classifications: – Categories really reflect the conditions of the property and where it is located.
Class A Apartment
This class of apartment is most appealing to most banks and insurance companies from a financing perspective due to larger apartments in prime locations because generally low deferred maintenance. These properties are typically occupied by white collar workers and have amenities such as garages, in-unit washer/dryers, pools, spas, exercise gyms, the latest technology, etc. They are typically between 1-10 years old. Typically they are in the path of progress and can support lower cap rates. They will likely have less cash flow than properties with higher cap rates but will have greater appreciation potential.
Class B Apartment
Class B buildings are also generally in good areas with many of the same amenities as Class A properties, but Class B buildings are 10-20 years old and occupied typically by both white and blue collar employed tenants. These properties will have decent cash flow and can include appreciation potential.
Class C Apartment
These apartments are older properties built within the last 21-30 years in working class areas typically occupied by blue collar workers and even some Section 8 tenants. The properties may be in declining areas but not necessarily dangerous areas. The units in Class C buildings are smaller than those in Class A and B buildings and the projects have fewer amenities. The occupancy rates are typically higher than Class A 0r B because they are more affordable. Individuals usually own Class C properties. This property class can present an investor with upside potential if property hasn’t been operated efficiently, occupancy is low or capital investment to increase marketability is profitable.
Class D Apartment
These buildings are older, in declining and even dangerous areas and as a result may have high vacancy rates, deferred maintenance, functional obsolescence and demand a high level of hands-on management from their individual owners. As of this writing, they can typically be purchased for higher than average cap rates. They may generate less of a return on investment in comparison to other properties despite their higher cap rates due to higher maintenance and management demands.
Rules of Thumb:
1. Class A & Class B properties are purchased for appreciation potential.
2. Class B & Class C properties are purchased for cash flow
3. Unless you are an experienced investor, don’t buy Class D properties.
To discuss your loan request or your property in more detail, please contact us at 786 269 4744 or info@royalcapitalgroup.com
