All Forum Posts by: Jay Sloan

Blackstone (B2R), First Key Lending, and Colony American Finance all offer portfolio residential loans. 

https://www.colonyamericanfina...

https://www.foacommercial.com/...

https://limaone.com/rental30/?...

What is the reason you're interested in an opportunity zone?

Do you have a massive tax liability? 

no problem. Good luck to you

First you need to analyze the surrounding area of your competing properties and determine what they are offering vs what your subject property is offering. Are you in the middle of rents? Bottom 20% of the market in comparison to comparable properties? Determine the rents in the market. A good indication of where you can position the property would be comparing it to the rents achieved in a comparable property where value has been added. Then it's just number crunching. How much rent are the competing properties getting in excess over yours? Determine that delta and then determine how much it will cost you to add the value needed to achieve those rents. The deduced projected NOI factoring debt and principal will be your expected return. As far as "what makes it worth it" is a question where the answer is specific to the investor. Different investors have different motivations and expected returns. Depending on the market, I would want at least 10% cash on cash.

I have limited experience with SBA Hotel loans, but depending on the structure you may be able to refinance with conduit debt and forego the recourse, as well as lock in to 75+% LTV, 30 year am, 10 year money (with mez debt maybe higher than 80%) with unbeatable rates (usually 275 basis points over the 10 year). You may be able to research that avenue and use this as ammunition to pitch to investors who are averse to recourse as a short term repositioning strategy. Assuming you have a flagged property. Implementing this strategy free's up your SBA to redeploy into additional ventures. Not to mention, lenders love to see conduit debt on your balance sheet.

Sam, if you have the liquid funds to buy a 1m deal, then I would do that.  Syndications are nice for being a passive investor but there's no substitute for hands on learning and even better, owning your own deal 100%.  Doing your own deal will help you gain invaluable knowledge that will be useful in the event at some time in the future you would rather have a more passive approach to investing.  If it were me, having done countless multifamily transactions, I would find a C class property where you can add value.  You need a good experienced broker to protect your interests and guide the transaction.  I sold an 82 unit deal to a novice client 3.5 years ago.  After cash flowing the property at around 100k a year, he made over 600k in profit ,and obviously recaptured his initial capital, when we sold last month.  His internal rate of return was off the charts.  Analyzing the market and determining what the vacancy rates are, what your competing properties rents are, and where your subject property lies in relation to those rents will give you a good indication of value add potential.  Depending on the deal and the lender, you may be able to secure a renovation loan on top of the acquisition loan for any improvements.  There's a lot more to it, but I'm happy to give you advice to help get you on the right track.  What state are you in?

Do you have any experience operating hotels?  If not, the bank may make you hire a professional management company, which you will then have to underwrite in your expenses.   If you are the only guarantor on the PG, your net worth will have to be sufficient for the bank to accept you as the sole guarantor.  Most investors know that they will have to sign a PG, and are willing to do so if the project pencils out a handsome profit, but investors will want a "risk premium" for signing a PG.  It would be better to have a few investors that are well capitalized that have the strength to guaranty the loan than to have that many.

2.75m

I told her that I need proof of liquid funds sufficient to cover 25% of the purchase price and to provide proof of that.  Just seems strange. I've never seen anything like this in 15 years of being in the industry.  I was curious if anyone up here had heard of this group or had any experience with them.

I've sold net lease deals subject to assumption with self amortizing debt that produced zero cash flow. Institutional investors buy these as loss leaders.  There are a plethora of reasons deals trade at very low cap rates. More often than not, there is an underlying value add play to the asset