All Forum Posts by: Jimmy Klein

So me and my partners are looking to invest in a multifamily project with a total unit count just less than 30 units. Its in a pretty nice area suburb of MD and the seller is asking around a 7% cap. Property was built in 1998. Thoughts on what a good cap rate would be here?

I have raised money from private investors. Total amount raised is $1 million. I am currently looking to purchase a multifamily project worth around $3 million. However the issue is my personal financials. My net worth is about a $100k. I know no bank will be willing to lend me $2 million given my personal assets. Are there any institutions out there that would do this? I am okay with a higher interest rate. I also understand that I will not be able to give a personal guaranty due to the limited personal net worth.

I'm trying to find it. However, thats interesting you say that. Why would that be bad to take on a non-recourse loan with investors? I am protecting myself and the investors from liability.

We are looking at taking a 70% LTV loan. Total loan amount is around $3,400,000. Regarding the equity portion, we already have investors who are committing their money. The loan is non-recourse, but the issue is that since we are the sponsor, we are required to still show personal financials. What is typically considered a good guarantor on a loan this size? My net worth is less than $150k, but credit rating is fairly good. Any former bankers here or anyone that has dealt with non-recourse loans?

Elizabeth, this project is a cash cow. I thought about just leaving it be, but I feel like corporate housing is much more complex, isnt it? We have to continually replace FF&E. Did your corporate housing provide housekeeping services as well as amenities like shampoos and other items?

Ok so here is the deal. We are potentially looking at purchasing a corporate housing project that has 40 units. The project was built in 2010 and is pretty much classified as Class A (stainless steel appliances, wood floors, granite countertops, etc.). Anyways the corporate housing project is going at a cap rate of 11%. Current occupancy is about 90%. Given that this is corporate housing, the cap rates seem to be higher. Anyways based on the rent roll, the leases are short-term, 1 - 3 months, but most are month to month. Our goal is to convert each unit as it vacates. Then once we can lease this up with long-term tenants, we will look to sell for a 6.5% cap or so. We are seeking advise on what needs to be completed to achieve a full conversion.

Given that utilities are included for the tenants, we know we would need to switch this to metering for the units? Is this installation difficult to achieve?

We will also need to move out all of the existing FF&E for all units.

These are the only two items I can really think of. Otherwise, a conversion doesn't seem that difficult. I wanted to ask the community on what else we need to do. Thanks for the help.