All Forum Posts by: Deepak Sukhija

@Deepak Sukhija - I agree with others that you should talk to a few lenders to get an idea of how much of a down payment you'll need to execute the deal. In addition to brokers, I would also suggest speaking to 1-2 regional banks/credit unions. You'll also want to consider if each lender provides funding for renovations/improvements. Some do and some don't. Once you get a flavor for lending options you should run a proforma and determine how much return the project will be able to generate on its's own and how much return will be left for LP investors if you go the syndication route. Happy to take a look at your pro forma if that would help. Good Luck!

@Deepak Sukhija, I would start with talking to loan brokers.  Berkadia, CBRE, Cushman all have capital markets teams that can help with loan products of this size.  

Investors are almost always the biggest challenge for any group, new or seasoned, but especially newer investors.  This is networking, tapping your current list of friends, family, co-workers, other real estate investors, etc.

Ideal duration depends on business plan: I, personally, am a fan of long-term fixed rate loans. But these do have drawbacks, typically in lower LTV, prepayment penalties, etc. A lot of investors used short-term bridge loans in 2021/2022, which are burning a lot of investors now.

Downpayment all depends on lender. More down means lower monthly payment means more cash flow. Higher leverage means (hopefully) a better return on your invested capital. But it is more than down payment, it is also any reserves. If you plan on renovating the other 13 units, how will you pay for that? Some lenders will only lend with that reserve funded, in addition to down payment, as the more you boost NOI, the more secure their loan becomes.