All Forum Posts by: Kyle Ransom

Hi Tony,

The type of financing i.e. rates terms and fees will depend on a few things in reference to the property and sponsor.

Some qualifying factors are:

The vacancy rate. Typically it is 10% or less it is considered stabilized and the property will qualify for a "conventional" of a paper loan. These loans you would get via Freddie Mac product and offer the lowest rates and terms

The properties that are more the 10% vacant or may need renovation to stabilize the property would qualify for alternative financing. There are a few variables here when it comes to the rate and terms for this loan but basically, the sponsor should expect to bring 25-30% down with interested rate from 7-10% depending on what state the property is in. For example is the property is vacant or barely leased up then it is considered a higher risk and therefore costs more in rates and fees whereas property that has requirements to stabilize it will be less it rate and fees. 

Another factor that determines what type of loan you can get for the property is the sponsor. Sponsors who have excellent credit and strong financials can actually get a non-recourse loan with excellent rates. If the sponsor has some challenges with credit then lenders who fund them will charge higher interest rates and fees.

So in short all of those parameters that you asked about are "typical" but just know that the rate and terms of any multi family loan are dependant on the state of the property and the financial strength and creditworthiness of the sponsor. 

Hi Stephen since it is a new home why not host the property with Airbnb to help increase your cash flow.

Just thinking outside the box here. You can consider a private investor to loan against your properties as well. That way you can negotiate your own terms that work best for you. 

Hi Amir,

From my perspective, since I started out just flipping houses. It was a great way to build capital but not to leverage my money nor time. If you want to retire commercial is the best option in my opinion. 

In hindsight, if I where to do it all over again I would have jumped in head first with commercial. 

I do please DM me and I will forward one to you

Hi Harsh I have a spreadsheet that will help you greatly in crunching numbers. Please DM and I will forward it to you. 

I recently had a chat with the Director Of Multi-Family Prooject with Airbnb and they are reaching out to Multi-Family Investors to offer a program to help implement short-term rentals for their properties. I have talked to single family home investors who do Airbnb instead of traditional tenant models and they say that they make more money with Airbnb. 

Has anyone tried this with their multi-family properties? If so how did it work out?

I read this article recently maybe this will help give you some insight

http://www.nreionline.com/multifamily/10-best-markets-multifamily-investment/gallery?slide=2

This property does not fit conventional guidelines. You will have to go alternative financing, stabilize the property then refinance into a conventional loan. You can expect to put 25-30% down with rate around 6-9% on a short-term note from 2-5 years and no prepay with some sources. 

When I started out in real estate I did some bird dogging to learn how to find deals and how deal work. At the time I just referred deals and the investors paid me my fee at closing without any written agreements. I was lucky. 

However, the climate has changed I think and people are more likely not to pay you.  I would suggest that if you do bird dog have them sign a fee agreement for your services in advance. Otherwise get the property under contract them assign the contract. That way you cant get circumvented.