What are your Creative financing avenues for multifamily assets (50+ units)?

[Eric Claxton]

Hey guys-

Our company tends to be very creative in the way that we finance the front end of our apartment purchases. So i was wondering if other commercial operators are the same or if they are more traditional.

Our typical deal

50% Cash/50% private for for 6-25 months (1.5%-3.5% interest only)
Stablize the asset

end:
Refinance through HUD 223F (83.5% LTV of stablized value, 30-40 year term, 3.5-3.8% interest, non-recourse)--at this stage, we repay our selves for some of our cash inlay for the purchase and we repay our private note holder (whom held around 50% of our purchase). We then add the asset to our long-term portfolio if it is B- or better in quality.

Our typical deal is:

50+ units (sweet spot-150+ units)
southeast
value-add /mismanaged -something that we can put some capital into, correct management course and stablize before we refinance it on a long term perm loan through HUD.

But this is how we do our multifamily- What works for everyone else out there in the BP community?

[Eric Claxton]

One last thing I left out - We buy the LLC that owns the asset, so that we can maintain chain of title (no tax hikes), and back it into HUD 223F as a REFINANCE- as we are refinancing our 50% private note. This takes less time and has alittle less red tape than if we ran it as a purchase we have found.