All Forum Posts by: Jean G.

@Brian Burke,

working on my first syndication and trying to nail down the right model. In a longer term hold, when you talk about "return of capital", are you talking about ROI (so an investor puts in $100k, they need to get back their $100k through the cash flow, ie their 8% preferred return, plus split of the overage, over 5 years for example) or are you talking about another setup, for example the investors gets back their capital through a refinance, and how does that work? (ie who gets how much from the refinance proceeds, and do the investors typically still keep any equity in the project after their capital has been returned through a refi?)

Thanks.

Jean

@Account Closed

You should speak to B2R Finance who does asset based lending, they have a new 30y fixed program, the rates are not as low as conventional, but better than nothing.

You can also try Clark County Credit Union in Las Vegas. They do have portfolio programs for non owner occupied in Clark County but I don't know what their guidelines are. I expect they would still be interested in DTI (like any bank) but maybe your liquidities could help. I also don't know if they do condos, some banks don't like condos in LV

If all else fails, have a look at Lending Home, they have an asset based program at 7 to 8% for buy and hold. Again, not the low conventional rates, but I'm pretty sure they care less about DTI...

Jean

I'll add what additional info I've found out since last week, since I've not made an offer on the property and waiting for it to be accepted:

- this property, and others outside major metros, qualifies for USDA guaranateed Multi Family loans which allows banks to go up to 90% LTV. These loans require the property to be income restricted to some extend, but the income ceiling is pretty reasonable. I am now trying to understand how they will allow someone to convert a non income restricted property into an income restricted one, without kicking out existing tenants...

- there are definitely banks that will still consider a small owner carryback, as long as I also have substantial skin in the game myself. I called 3 or 4 on my list and one was willing to consider this (Mountain America Credit Union), I expect that I'll find more if I call more...

Jean

Hi @Cristy Gray,

nice meeting you. I live in Las Vegas and have 2 single family properties in Bullhead (actually one is in Fort Mohave). I'm looking for more as well as possibly bigger commercial properties (multifamily apartment complexes).

It would be great to connect. Let me know if I can help in any way.

Jean

Hi Cole,

I own a vacation rental in Hatch, near Bryce Canyon, (not online yet, but almost) and would love to join the discussion. In particular I'd like to ask if you've had any luck putting your rentals into pools that let you exchange nights at your rentals against nights in other places that you can use for your own vacations?

Also I'm looking for a blanket commercial property insurance for my rentals in UT, AZ and NV, please PM me if you can help with that...

Jean

Hi Aaron,

you mention St George / Kanab. Where exactly is the property? I can recommend an excellent contractor from Hatch (who did my vacation rental remodel, very detail oriented and lots of creative ideas. Doesn't mind small jobs either.) but I don't think he will travel past Kanab and Cedar City. If it's east of Kanab I can recommend someone from Page. The contractors out there are also still pretty busy from the summer season, but if you wait another month, their work will slow down and they'll be much more hungry for work throughout the winter.

Jean

Hello,

I am reading through the requirements of USDA Multi-Family loans (for larger non owner occupied multi-family properties), and they have certain income limitations for tenants, as they are intended for lower income housing.

Does anyone know what happens if someone were to buy an existing property (with existing tenants) with such a loan? Is it not possible if the existing tenants exceed the income limit (or they expect you to kick out these tenants?), or do they only require new tenants to meet the income limits? (Which for their "guaranteed loans" don't seem that low)

Perhaps @Brandon Turner has some input on this? (I learned about USDA loans in his book in the first place).

Jean

Hi @Michael Franklin,

this would work well, with 80%LTV I could even do 10/10/80, the question is whether mainstream commercial lenders actually allow seconds. The ones I spoke to said they "don't do that anymore", but I may just need to call. If someone has done this with mainstream banks and can confirm that this still exists in 2015, that would be very useful.

Knowing that this is actually possible would allow me to go place an offer tomorrow (before the thing goes under contract with someone else), otherwise I need a bit more time...

Jean

Hello,

I have finally found a bigger multifamily property that I like: 50ish units in a rural but very stable market, not a warzone at all, strong rents, and at around 2 million USD, a cap rate approaching 10%.

Now comes the question of financing and the amount of cash I need to bring into this deal. I have a commercial lender that will finance at 80% LTC for a rate below 5%, which is not bad, but I was wondering if anyone can give advice on how to do the deal with less cash out of pocket? Are there commercial lenders out there that will go up to 90% LTC? Or lenders that will do LTV instead of LTC (which would probably also help since it will likely appraise higher)?

Owner financing seems unlikely, but if I were to somehow convince the owner to finance a small amount, are there commercial lenders out there that will allow this as a second? (The ones I spoke to don't)

Any advice from experienced multifamily investors about how to package it in order to reduce the amount of cash required would be appreciated.

Jean

@Wesley Barnett

If you want to find a bank to refi at current market value sooner than in 12 months, you need to call every bank in town and ask them for the seasoning time after which they can use an appraisal instead of your acquisition cost. Then call every bank in the county, then every bank in the state (you can find the names on regulator websites, to make sure that you don't miss one). If you speak to every single bank you are bound to find one that will do it in 6 months, 3 months or even within weeks. You just need to keep asking until you have spoken to every possible bank.

Jean