All Forum Posts by: Kris Benson

Intuitive Equity Partners will be there!  Looking forward to networking with like minded individuals and finding an operator or two that we can introduce our investor network to in 2018!

@David Thompson and @Joe Fairless  looking forward to connecting with you over a beer!

Kris

Good Evening BP Team,

We have had numerous inquiries for short term (3 Month) leases on a furnished unit.  Does anyone have any experience with furniture rental companies in upstate NY (Syracuse/Utica area) ? 

I cant find much online that services upstate NY...

Thanks

Kris

Derek, thanks for the response.....I will give you call tomorrow morning as I have some windshield time...

Not sure on CMBS but I know the second option is Fannie Mae program. I think the LTV is low because we are in a secondary market with no comps....

BP Team,

I am in the process of a refinance on an apartment community we built in Central NY.  We recently received two term sheets from our commercial broker and I am curious to get some feedback from the group if we are leaving anything on the table.

The refinance will cost us between 90-110K so trying to ensure we have our "ducks in a row"

I understand that it will be difficult to offer direct feedback on specific terms as it is dependent on the market, property, etc. but any information/guidance would be great.

Broker Fee in both scenarios is 1% of proceeds

Here is a summary of the two term sheets we got yesterday:

Option 1

Proceeds: $4,750,000

oRate: 4.904% Today

oTerm: 10 Years Fixed with 30 Year Am

LTV:70%

oPrepayment: Defeasance. This is very hard to prepay until the end of the term.

oLockbox: Rents go into here, then are cleared to be used by you after it clears the account. There is an annual service fee for this, which is not determined here. This is used in case you fail to keep your income at a certain level to meet the loan terms.

oGuarantee: Nonrecourse

oDeposit: $45,000

oLegal Fees: $25,000

oClose: 45 Days

Option 2

Proceeds: $4,580,000

Rate: 4.65%

oTerm: 10 years fixed with 30 year Am

LTV:70%

oPrepayment: 5,5,4,4,3,3,2,1,1 – open for final 90 days

oLockbox: None

oGuarantee: Nonrecourse

oDeposit: Will be around $10,000 once the terms are accepted and the application is sent out.

oLegal Fees: $5,800

oClose: 60 Days

@Vena Miller  Thank you for taking the time to respond!  We would absolutely like to speak with you and your team once we have the time to compile a list of what our group is looking for.  I would like to be able to reach back out you once we have transparency on the details of the project we are looking for.

@Michael Le  Thanks for the referral!  David look forward to speaking with you!

@Mindy Jensen  thank you for replying, yes I understand the marketplace is where we can adept is our deals and funding opportunities. 

@William Paton  we are open to hearing about anything right now.  Feel free to PM me and we can discuss further.

Thanks

Kris

BP Team,

I am about the embark on the next step of my real estate investment career and I need your feedback.  I have assembled a group of 4 people including me who represent a significant amount of capital and experience.  Two members of the group have been involved in development and construction of all aspects of real estate for over 30 years.  They are going to act as our guidance as well as capital/balance sheets.....

The third member of the group and I are just starting to make the transition to serious real estate investors.  We developed and own a new 32 unit apartment complex with an additional 16 units under construction, we also have participated in and created 3 private equity funds to fund other real estate projects in Boston and Upstate NY.  Our contribution to the group will be capital and the legwork....

We have capital, experience and balance sheets to get a project funded, but here is our problem.  We cannot find the next apartment deal we want to invest in.  I want to be able to market to the BP community to expand the number of deals we are evaluating.  Right now we are limited to the geographical areas we live in. 

We are hoping to find JV type arrangements in apartment projects in the $5-$8 million dollar range. What are some ideas on how to engage people looking for partners/funding?

Our group will be working on our "checklist" of our minimum requirements in the coming weeks so we have a defined algorithm to evaluate deals.  Where should I post this within BP or on the web to get the most exposure?  Are there commercial lending brokers or agents on the BP community that you can point me to who have the experience to get us to the deals?

This will be an ongoing discussion for us so any insight would be greatly appreciated!

Kris

Hello BP!

We are in the midst of our lease up on our 2nd phase of our apartment community in upstate NY.  I am looking for an online marketing strategy or a professional who can help us manage our online presence. 

We have ads posted on the usual (Trulia, Zillow,Craigslist,etc.) but we are interested in expanding into Google Ads, Facebook, etc. but not sure I am savvy enough right now to make that jump without help.

Any ideas or resources you have used in the past? 

Sorry not sure how to use FilePlace to insert files to a post....

Here is the dropbox link to the pro forma at stabilization and equity investment use....

https://www.dropbox.com/s/41xmt1iuhhft0u7/For%20BiggerPockets.pdf?dl=0

Ok BP Team,

Looking for some high level advice on a deal my partner and I are looking at.  I have had some experience raising private equity money to fund real estate projects in the past.  Mostly development and sales of condos.  Looking to transition to ownership stakes to create long term passive income.

THE DETAILS:

There are 4 owners looking for $1 Million to help fund the build out of a 84 unit 55+ apartment community outside of Albany NY in exchange for 35% ownership in the project.  They are in a bit of distress as they tried to make the project condo sales and the sales were slower than they estimated so they are converting to apartments.

The bank needs a personal guarantee from my partner and I and the $1 Million in equity will be used for the following:

$500,000 Construction Equity (Lender)

$150,000 Marketing Lease Up Cost

$350,000 Land Loan Buyout

The owners have a GMP contract with a Trinity Construction and Management Corp in Mass who will be bonded and there is a $500K contingency.

There is a lender with a term sheet for the construction financing with great terms.  They did the site visit last week, I will have the updated term sheet this week.

24 Month Build Out and Lease Up.  They already have 8 units built including the model units so we can begin leasing now.  The pro forma is using 3.5 unit per month absorption rate.

I have had a 3rd party market study completed on the area and they estimate a strong demand for these units at 4-6 units per month and good growing demographic in the area of ages 55-74.

OK HERE IS WHAT WE HAVE NEGOTIATED:

At 24 Months Stabilization we refi and payback $500K of our original investment, so we still have $500K left in the deal.

3 Months Later take out permanent loan with non recourse permanent loan. (HUD?)

35% Ownership represents $132,370 in cash flow.....

Basically we are making 26% on our money still in the deal and if there is ever a sale we have negotiated 20% of profit.

MY CONERNS:

 My personal guarantee on the project.  The bank is going to need our balance sheets to do the construction loan and that's what makes me nervous.  Any ideas on how to limit this?

I also would like an appraiser to help me understand the valuation they have put together for the equity payback schedule.  I want to make sure that at refi we have the dollars to take out and payback our investors.  I would be happy to pay someone for their time to review this with me....

I have attached links to the Equity Investment Use and ProForma sheets we are using to evaluate the deal.

Any help would be greatly appreciated!

Thanks

Kris