Multi-Family Investing Assumptions Challenged

[Vishal Punj]

Happy Monday fellow BP'ers!  Been a lurker here in the forums now for several months.  I've listened to several of the BP podcasters who discuss MF as well as read several of the threads here on the forums, but was hoping if some of you could challenge a few of the assumptions I've gathered thus far. 

Assumptions:

1) Upon successful repositioning of a property (3-5 years), expect the refinance to be a 7-10 year term product with a 20 - 25 amortization schedule.  If this assumption is correct, then a follow up question is what options does a successful syndicator have at the conclusion of this 7 - 10 year term?

2) Complexes with units < 100 units rarely justify on site property management.

3) FICO scores do not play a role in complexes with units > 100 units.

4) Loans on complexes with complexes > 100 units are non-recourse 

Thanks in advance all!

[Nick B.]

1) After 7-10 years sell or refinance again if it makes sense

2) Depends. 90 units definitely needs onsite PM. 10 units - not so much. A class 30 units may have enough income to support onsite PM while C class of the same size may not.

3) Your credit is evaluated but not as strict as for SFR. You have to have no adverse records on your credit though

4)  Depends. If the property is stable  (90% occupied for at least 90 days) and the loan amount is larger than $1M (or more) and the sponsor had previous experience, the loan may be non recourse. If the occupancy is low and the property needs a lot of work, the loan will most likely be recourse although non-recourse is also possible.