Apartment Loan 101

So you're interested in going into business as a property manager? Have you given any thought yet to you'll enter this potentially profitable market? Reality check-unless you've just inherited a large sum of money from a relative or are otherwise independently wealthy you're going to find someone to borrow from. This is where an apartment loan comes in.

Before you visit the local bank or other lending institution, it may be wise to ask yourself how long you plan to own the apartment building or complex. Are you investing for the long-term? Answering this question will significantly influence the type apartment loan you should get.

If you are planning to own the property for two years or less, most experts agree that an apartment loan with an adjustable rate mortgage (ARM) will be your best bet. Like the name suggests, an ARM is a loan will an interest rate that may change with time in accordance with various factors. ARM apartment loans usually offer a better initial interest rate than other loans to offset the risk of future interest rate changes. An interest rate ceiling that may be reset annually also protects the mortgage holder.

If you plan to stay in the property management business for the long-term, you may want to look at getting a fixed rate apartment loan. A fixed rate loan guarantees the same interest rate over the life of the mortgage.

Supposing interest rates are historically low at the time you secure the apartment loan, this type of loan will lock you in at the best rate possible. On the other hand however, if interest rates are historically high at the time of the loan, you might be stuck paying interest at a higher rate than you would have with another type of apartment loan.

Another important question to answer before seeking an apartment loan source is the approximate cost of the property. This may seem like a no-brainer when looking for an apartment loan, but too many first-time investors just take the interest rates they're given without question. If the apartment building you're interested in is selling for over $500,000, a direct lending source or investment company can usually give you a better interest rate than most banks or credit unions. However, if you're looking at a smaller apartment building selling for less than $500,000, you may want to check interest rates at the local bank.

With banks and other lending institutions anxious to provide you with an apartment loan, new loan options have emerged in recent years. Generally speaking, smaller banks and other lending sources like direct lenders have a greater degree of flexibility in what they can offer borrowers. In order to attract larger numbers of borrowers, many lenders now offer non-recourse.

A traditional recourse loan means that the lender has claim on personal or corporate assets in the event of a default by the borrower. On the other hand, a non-recourse apartment loan means the lender cannot hold you personally liable if you fail to repay the debt as promised. The only recourse for compensation to the lender is to take the property you've pledged as security for your loan, but he cannot claim any other assets or money from you if you default.

Whichever apartment loan option you decide on, it's important to be certain you understand the details. It's vitally important that you choose a lender that has both the experience and inclination to take the time to sit down with you and answer your questions clearly. Getting your apartment loan from a source you can trust will go a long way in helping you find success and enjoyment in the exciting world of property investing and management.

Cameron Brown is an internet marketer specializing in investment property. For more information on securing an apartment loan, please visit SNC.

There is something emotionally charged about the buying and selling of New York high-end real estate. How else to explain the juggernaut of reality TV shows about high-end brokers?

After 30 years of marriage, Sharon and Michael Newman decided it was finally time to move from the Catskills to New York City.

On blocks near Kissena Park streets are quiet, houses are small, and the electricity that charges the atmosphere in downtown Flushing is nowhere to be found.

A five-story, seven-bedroom house in Brooklyn Heights has sweeping views of New York Harbor and the Manhattan skyline.

Demand is so intense that there are waiting lists in some buildings, and a few landlords report that eager renters are even bidding up rents.

Sales at the very high end of the market barely missed a beat in the recession. But that prosperity hasn’t yet trickled down.

A Flatiron condo, a Midtown South co-op and a Brooklyn Heights carriage house.

A four-bedroom ranch in Montclair, N.J., and a four-bedroom colonial Cape in Babylon, N.Y.

For a century, Roosevelt Island housed a grim penitentiary. It was demolished in the 1930s.

More borrowers are opting for fixed-rate loans with terms other than the standard 30 or 15 years, especially when it comes to refinancings.

Two more glass skyscrapers are added to a group of towers on the waterfront of Long Island City.

Insurance coverage for a co-op unit; when a tenant is ‘blacklisted’; a co-op is smaller than estimated.

The market for $500,000-to-$600,000 houses in Westchester has become especially active.

A shaky real estate market means more sellers are providing buyer concessions, from gift cards to help with paying property taxes.

Houses of worship are adaptable to residential and other uses as congregations dwindle.

Nearly two million Americans could benefit from mortgage relief from the nation’s biggest banks, as part of a broad government settlement to be announced on Thursday.

A cold war-era satellite relay station is for sale in California after a Silicon Valley mogul gave up on plans to turn it into a weekend home.

How can I make my front porch more appealing to buyers?

Court hearings meant to protect New York homeowners from foreclosure are hopelessly slowed by endless paperwork and requests for additional information.

The Bay Area and Silicon Valley expect the windfall from the Facebook stock offering to make their in-demand region even hotter.

The house, designed by the architect Eric Fisher, looms over the street like a big industrial arm.

A town house in Dallas, a midcentury modern in Rhode Island and a Tudor in Denver.

Prices in some parts of the country are still off by as much as 25 percent from their 2007 peak.

Trinity Church is the largest landlord in Hudson Square and is part of the effort to rezone the area to residential from manufacturing.

Rising oil prices and a boom in shale exploration are leading companies to add office space in the Houston area, most notably Exxon Mobil.

Ms. de França is the president and chief executive of Douglas Elliman Development Marketing, which focuses on new residential developments.

Meet the real estate broker’s interns: an ambitious group willing to do anything, earn nothing and wake up early on a Sunday to fluff the couch cushions at open houses.

A Flatiron condo, a Midtown South co-op and a Brooklyn Heights carriage house.

A four-bedroom ranch in Montclair, N.J., and a four-bedroom colonial Cape in Babylon, N.Y.

Homes in Dallas, Rhode Island and Denver.

Compare the cost of renting and buying equivalent homes.

For recently divorced men, a new breed of decorators offers help navigating a strange new world.

Plants that light up the winter garden can be found at Broken Arrow Nursery in Connecticut, which has long been a favorite of gardening geeks.

A sister in need drew the painter Beverly McIver back home to North Carolina, unaware that a new beginning was in store for both of them.

A jewelry designer finds striking new objects for storage.

Timothy Sakamoto and Jochen Repolust are part of the small but growing niche making mobile apps focused on specific works of architecture.

To promote an auction of 20th- and 21st-century design, the interior designer Stephen Sills has created a preview exhibition in an apartment at the Apthorp.

Fishs Eddy now sells plates acquired from the archives of the now-defunct Syracuse China Corporation, many more than 100 years old.

The designer Russell Greenberg creates custom baby rattles with ends shaped like profiles of mom and dad.