All Forum Posts by: Matt Weiler

@Lucia Rushton yes, because of "the great recession", as ridiculous as that sounds. Prior to 2008, I structured a bunch of line of credits on commercial assets, however, now, LOC's are essentially non-existent on commercial properties no matter the asset type or the geographic location. I can bore you to tears as to why, but I will save the rest of the community from my spiel. Bottom line, yes, the market crash back in 08/09 caused this.

Ask 2 or 3 commercial agents / brokers in the area what the going cap rate is for stabilized multifamily deals in that specific area.  Take the average of what each agent / broker tells you and use that. Ask specifically for cap rates on deals that closed within the last 6 months.  

Once you have the cap rate, ask those same agents / brokers for multifamily rent comps that are comparable to the asset class you are targeting. Once you have the cap rate and know what the stabilized rent roll will look like, you can determine the NOI, assuming you know what you're general expenses will look like. From there you can determine the stabilized resale value.

I'm happy to go more in-depth and walk you through the entire process.  Feel free to directly connect with me.  

A 1031 is very easy to understand and most can be found online for free or through a phone call to your accountant or a friend who's an accountant. 

Once you sell a particular property for a profit, that profit must be rolled into another property of "like-kind" within 180 days of the sale.  Once you sell the property, you have 45 days (out of the total 180 days) to identify a property (i.e. get under contract) and than another 135 days to close the sale, which get's you to the total of 180 days.  You can either use your profit to buy a property free and clear or use your profit as your equity requirement if you're obtaining a new loan on the acquisition. To realize the deferred tax benefits of a 1031, you must use a 1031 intermediary / facilitator, which is essentially a third party.  

Hope this helps. 

Miami is a tough market and virtually impossible to compete against cash buyers. Plus, there are tons of cash buyers in Miami.  

I, wholeheartedly, agree with what both @Russell Brazil and @Joe Villeneuve said.  88% leverage, 3.5% fixed, amortized over 30 years for 5 year money is, frankly, unheard of in today's market and very cheap money.  Sounds like you have a great deal in front of you. 

Not all agency lenders are created equal! 

You most definitely need to form a strong alliance with a mortgage broker who can navigate you to one of the 11 appropriate DUS lender's for your specific deal.  

Most investors don't realize there's a difference and end up going with the first agency provider who bites on your deal.  

I can tell you, without a doubt, there are differences - some major and some minor. For example, some agency lenders can get waivers approved that some can't. Waivers for things such as debt service coverage ratio (DSCR) exceptions, waivers for reserve requirement exceptions and so on. Having a broker, who's seasoned enough to know to ask for such waivers is crucial to getting you the best possible deal / loan structure. Also having a broker, who underwrites your deal and packages it up, to best position the loan request, PRIOR to sending it to the lender is crucial.

Feel free to reach out to me directly for further advice.  I represent the largest originator of agency debt in the country and kind of have an unfair competitive advantage when it comes to procuring agency debt. 

In today's current lending environment, no matter where the asset is, a line of credit on an investment property, through a conventional lender, is almost near impossible to obtain.  Even non-conventional lenders, most likely won't entertain this.  

What's the purchase price? Do you plan on leasing the vacant space or developing the vacant space into some other use? Financing deals of this nature is what I do on a daily basis and could most definitely point you in the right direction, but would need to know more of the specifics. Feel free to direct message me and let's chat. 

Cash flow depends on NOI, so that is a critical piece of info we would need to know in order to answer your question.

@Hadar Orkibi's strategy, as he mentioned above, is in my opinion the best strategy for long term growth and wealth building.  Once you add the value and stabilize the property and get at least 1.5 to 2 years of operating history, the overall value of the property increases allowing you to refi, pull out the accumulated equity and roll that into a new asset.  Wash, rinse and repeat and you'll be on your way to a nice size cash flowing portfolio. 

Hi Jake, I can give you a bunch of insight on financing options for a project like this.  I've financed tons of multifamily developments throughout the U.S. and would be happy to give you as much information and tell you about the different financing options available.  I also have access to both Costar and Reis, which can help you with rent comps in the area.  Feel free to connect.