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To own multifamily housing, you and your property development team need to have certain skills and be financially strong enough to complete any construction or rehabilitation according to a lender’s standards. You’ll also need to keep the property well maintained over the long term.

As owner and project lead, you’re responsible for keeping the team on track. Speak to as many experts as possible to build your knowledge base and increase your network of potential team members. You’ll need to work with your lender to determine if your team’s skill levels meet your lender’s requirements around certification, training and experience. Clarify these requirements prior to adding team members.

Common team members include architect, lawyer, licensed subcontractors, general contractor, property manager and expediter. If you’re interested in using subsidies, it’s helpful to have someone on your team who’s familiar with subsidy program requirements.

Lenders will want to check your financial health and that of any member of your team with an ownership stake in the property. General requirements include:

  • You invest some of your own equity in your project
  • Liquid assets sufficient to meet your equity requirements, plus a cushion
  • Sufficient net worth—your total assets minus your total liabilities

A lender may also require that you provide a personal guarantee of payment, a payment and performance bond, a letter of credit, or cash in lieu of a letter of credit.