All Forum Posts by: Bryan Hartlen

@Steve Priola sorry that I can’t help with your question, but I’m wondering if you would mind sharing your description of workforce housing and how it’s business model differs from standard MF rentals?

It looks like you have an error in entering the insurance cost ($8). Otherwise, assuming that you verified the various expenses and market rents, it looks like you have all the bases covered.

I’m assuming that you have the ability to cover the assumed negative cashflow of 1300/mo.

Note that there may be other costs that should be considered that could increase your monthly costs. Have you budgeted for vacancy and turnover costs that will occur when you start to raise rents. Depending on the situation you may also want to budget legal expenses for evictions. What about repairs and maintenance costs?

If you can handle the monthly costs then it becomes a question of your willingness to pay today for appreciating tomorrow. As has been noted this is more speculation than investing.

One option to consider would be STR one or more of the triplex units? Generally allows you to 2-3x the standard LTR rents. I'm assuming ocean views would mean a strong tourism market?

@Kristi Miller, agency debt (loans secured by Fannie or Freddie) will generally be cheaper rates, won't cover any value-add, will loan based only on current income (not performa) at a DSCR of 1.25 or better, will require loan amounts greater than $1M, will offer non-recourse loans but still require proof of the sponsors cumulative net worth being at least equal to the principal amount (not in reserve) and liquid reserves to cover 9 months of P&I (also not in reserve). Local banks will have more flexibility but generally have higher rates and will require guarantors. Local banks and national lenders will also have bridge products if you need to borrow for purchase + value-add.

I'd suggest you talk to both to see which ones best meet your needs. 

Not a lot of details but LimaOne offers MF bridge loans nationally. 

Hi all. We’re putting together an opportunity on a mid-sized MF apartment. We’d like to structure this as a GP/LP opportunity. This will not be the first MF deal we’ve done, but it would be the first one we’ve structured this way and new for our private investors. I’m looking for your thoughts and opinions on what you’d find compelling as an offering in terms of the following:

- minimum IRR

- average CoC return

- minimum preferred return

- preference for share or operating cashflow compared to equity share (how much cashflow split, if any, would you forego for a larger share of equity split? Or visa-versa?).

- would a share of the depreciation expense be interesting?

Thank you for your thoughts and opinions.