Loans for Apartments:

Since April of 2000 Caffrey & Company LLC has been helping real estate investor’s nationwide find the best loan product for commercial real estate investment properties.  Call for great rates for commercial and multifamily loans in Indianapolis, Indiana.  Caffrey & Company LLC has a special focus in an Indianapolis apartment loan.  The most attractive, non-recourse loan terms start at $1,000,000 for multifamily properties.  Therefore, if you are looking for low interest rates, a non-recourse loan up to 80% of value (Over $5 million leverage up to 83% to 85% is available) you are at the right place.

Multifamily Loan Underwriting:

Each loan product has unique underwriting requirements.  Above all, how the loan data is presented to the lenders can have a negative or positive impact on pricing and loan proceeds.  We offer this expert loan underwriting for an Indianapolis apartment loan.  Therefore, this will help to achieve the best pricing and loan terms for commercial real estate investment.  We encourage our clients to submit key property level data for a free loan underwriting review.  This initial loan underwriting normally takes less than one business day for us to respond with several apartment loan options for you to consider.  Here is a short list of property level data that would aid in providing a loan quote:

Required Underwriting information needed:

• Last two years and Year-To-Date detailed Profit and Loss statements (in addition a trailing 12-month P&L is best if available) on the apartment complex.
• Current Rent Roll
• Brief narrative description of the property.
• If available a few electronic photos. Or a copy of the real estate agent’s marketing package.
• What is the purpose of the loan? Acquisition, Refinance, cash out, reposition the property (renovations).

Next we will need to know your objective, how much do you wish to borrower on the apartment complex?  Is this a long term investment or short term investment?  In other words outline your loan request.

We understand the financing of an apartment complex is a very important component of the investment.  Therefore, we encourage our client to send us details on the property before finalizing the purchase and sale contract for an indication of the type of loan that might be available to a particular property.

Fixed Rate Loan Terms are Available for Multifamily Properties:

Loan terms are available from 3-years up to 35-years (40-years for new construction on loans over $5 million).  The Apartment buildings can be Garden Style, High Rise, Age Restricted, Student Housing, Section 8 Tenants and subsidize properties.  There must be at least 5-units.  If you have several buildings all with five or more apartment units that you wish to place under one loan no problem, the buildings should be within 3 to 5-miles from the other properties for best loan terms.

How long will it take to close the Loan?

The closing process normally takes between 45 and 55 days to close the loan.  Closing costs vary between loan products.  Before you put any funds out we will provide a detailed estimate of the anticipated closing costs.   At this stage you will know the loan product, the loan terms, and the anticipated closing costs to allow you to make an informed decision before moving forward.

Mutlifamily Market in Indianapolis is in great shape:

An upswing in hiring activity in the Indianapolis job market supported strong apartment fundamentals through the first quarter of 2021. Nearly every major metro employment sector recorded net job growth between April 2020 and March 2021, restoring 76.8% of jobs lost at the onset of the pandemic. Residents returning to work prompted apartment operators over the last four
quarters to raise rents in 12 of the metro’s 13 submarkets. Subsequently, metrowide effective rent appreciated 3.8% year over year, reaching $965 per month in the first quarter of 2021. During this time, operators added over 3,000 net renters, equating to a 1.0% increase from the previous year. Supply trailed closely behind with 2,600 units, boosting the average occupancy rate 40 basis points to 94.8%. Further job reclamation is still needed to help many metro residents, like workers hurt by unemployment and have not yet benefitted from the early stages of the recovery. However, residents are increasingly participating in everyday activities that support economic longevity. There is still much to look forward to in Indianapolis, including job expansions from Amazon and Apple, as well as premier events like the Indy 500, which will again welcome 135,000 fans at the end of May.

Indianapolis Apartment Occupancy gains traction:

While many markets encountered significant consequences from measures taken to mitigate the pandemic, Indianapolis’ rental sector performed extraordinarily well. A sturdy jobs recovery, combined with sustained apartment demand, pushed up the occupancy rate to end 2020 at 95.1%, reaching a 20-year peak. Indianapolis continues to set the standard for urban renewal and economic development in the Midwest. After 13,200 apartment units delivered in the Indianapolis metropolitan area in the prior five years, 2,564 market-rate units came online in 2020, and builders were underway on 17 projects at the start of this year. Most of the deliveries were placed in the area’s growing corporate corridors in the Carmel/Hamilton County submarket, and builders will continue to focus on additions in the area during 2021. While the construction pipeline tapers this year, apartment occupancy will remain elevated, ending the year at 95.0%. Underpinning healthy apartment occupancy is housing demand created by a consistent net migration of about 12,000 people annually and rising household formation.

Job creation is attracting new residents. Payrolls should be fully restored by year-end 2022 as mass hiring occurs at Bottleworks District, Indiana University Health, and Amazon.com Inc. Indy’s
economic rebound will support upward pressure on rent. Monthly effective rent is anticipated to reach $1,005 by 2022, notching gains of 2.7% this year and 3.4% next year. A watchful eye will be on the growing trend among single-family home rentals (SFR). Indianapolis was among the top 20 SFR markets last year and is forecast to be among the top five SFR markets during 2021.

Additional Data shows speedy Pandemic Economic Recovery for the Indianapolis Market helping boost demand for Multifamily Properties:

Accelerated recovery of jobs underpins market stability. Prior to the health crisis Indianapolis had an unemployment rate of 2.7 percent, which was the metro’s lowest recorded rate dating back to the early 2000s. In March and April roughly 131,000 jobs were shed as nonessential businesses were forced to close; however, the summer reopening fueled a quick bounce back. Nearly 70 percent of the jobs lost in those two months have been recovered and the unemployment rate has moved down from 13.8 percent in April to 5.5 percent in September. More challenges are ahead, though, particularly for the leisure and hospitality sector. Rising COVID-19 cases could lead to greater capacity restrictions, forcing more shops to reduce staff while outdoor spaces are closed for the winter.

The 1,070 units completed in Carmel in the first nine months of 2020 contributed to a metrowide total of 1,900 new doors. As of November, an additional 1,800 apartments are underway throughout the market. Indianapolis multifamily has had one of the strongest performances in the nation recently, with the vacancy rate falling 90 basis points in the third quarter to 4.2 percent. Sturdy demand for luxury rentals pushed Class A availability down 120 basis points from July through September to 6.2 percent. Tight vacancy and consistent lease-up are helping to propel rates. The average effective rent increased 1.2 percent quarter over quarter to $949 per month in September. Downtown Indianapolis was the main exception to an overall strong market showing; average rent in the urban core fell 2.3 percent. • Properties traded at an average of $79,000 per unit over the past year ending in September, appreciating 8 percent from the previous period. Meanwhile, the average cap rate dipped 20 basis points over that stretch to 6.6 percent. Buyers looking for suburban apartments most frequently targeted Anderson and Noblesville. A handful of upper-tier assets traded here over the past few months.

In conclusion can read about specific loan products. Freddie Mac, Fannie Mae, HUD/FHA, Commercial Mortgage Back Securities (CMBS) and other loan products.  Want more details and sample interest rates for apartment check out Interest Rates for Apartment Loans also on our web site:   Apartment Loan Interest Rates.

Keep Caffrey & Company in mind when searching for an Indiana lender for apartment loans.  Have a question please call:  Mike Caffrey (913) 402-7077 or email: [email protected]

On our web site you can read about specific loan products: www.caffreyloans.com/loan-products, offered by Freddie Mac, Fannie Mae, HUD/FHA, Commercial Mortgage Back Securities (CMBS) and other loan products. Want more details on sample interest rates for apartment check out Interest Rates for Apartment Loans also on our web site: www.caffreyloans.com/apartment-loans.

Have a question please contact
Mike Caffrey
Telephone: (913) 402-7077
[email protected]
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