These days, lenders are looking at borrowers and sponsorship more closely than ever before.

"Smaller loans are going to get more scrutiny," said John Cannon, executive vice president of Capmark Finance, during a panel on finding small-balance loans at the 2009 Apartment Finance Today Conference.

For John Barbie, vice president of PNC ARCS, a borrower must have at least four properties with good performance and proximity in a market to be considered for a loan.

Cannon agreed, saying the out-of-town borrower chasing cap rates is not a good recipe for success—no one is allowing that anymore.

Barbie advised borrowers to do what they can to get an agency loan in the future. Get expenses down, make calls to get real estate taxes and insurance reduced, don’t let your properties go into disrepair, and keep rents as strong as possible were his key pieces of advice. "Every little bit will help," he said.

Joe Forman, CEO of Bond Street Capital, encouraged owners who don’t qualify for agency loans to call every bank in their market. "Be brutally realistic about your own assets or assets you’re looking at. This is a time of incredible opportunity for entrepreneurs. You ought to be on the hunt. Loans are at incredible yields at incredible profits," Forman added.

Bill Hughes, senior vice president and managing director of Marcus & Millichap Capital Corp., urged borrowers to start early and to have all of their documentation in place before talking with lenders. It’s best to have all of your paperwork in place— current rent rolls, rental contracts, two years of operating costs, two years of tax returns, financial statements matching tax returns, and all K-1s, he advised. Part of the reason for the preparation is that, in today’s environment, time kills these loans. Being able to act quickly and decisively helps in the eyes of the lenders.

Forman also cautioned those looking at hard money loans. He encouraged doing due diligence on the lender and being ultra-careful. "If it’s too good to be true, it’s absolutely too good to be true," he said.