All Forum Posts by: Eric Claxton

Hi matt, we have done many deals that way Joel has outlined and seems to work just fine for us- although it does depend on what bank it is that holds the REO. As far as the hard money- at 50%LTV, i would think it would be fairly easy to locate a hard money lender at those LTV (rates will be high).

Multifamily investment is by far one of the best fields to be in within the real estate industry in my opinion.

In our experience our headaches stop after we stablize and refinance the asset. We pretty much get rid of the headaches when our onsite managers handle the sites and report in monthly. With this being said, I strongly advise buying 50+ units at a time- as this is somewhat the threshhold in multifamily for making it economically reasonable for an onsite manager.

Couldn't have said it better my self. It is very doubtful a commercial lender will finance a dark multifamily. So as james said, a cash offer will likely be your recourse.

Totally agreed.

Doug, What have you found to be true of the conduit money?

One last thing I left out - We buy the LLC that owns the asset, so that we can maintain chain of title (no tax hikes), and back it into HUD 223F as a REFINANCE- as we are refinancing our 50% private note. This takes less time and has alittle less red tape than if we ran it as a purchase we have found.

Hey guys-

Our company tends to be very creative in the way that we finance the front end of our apartment purchases. So i was wondering if other commercial operators are the same or if they are more traditional.

Our typical deal

50% Cash/50% private for for 6-25 months (1.5%-3.5% interest only)
Stablize the asset

end:
Refinance through HUD 223F (83.5% LTV of stablized value, 30-40 year term, 3.5-3.8% interest, non-recourse)--at this stage, we repay our selves for some of our cash inlay for the purchase and we repay our private note holder (whom held around 50% of our purchase). We then add the asset to our long-term portfolio if it is B- or better in quality.

Our typical deal is:

50+ units (sweet spot-150+ units)
southeast
value-add /mismanaged -something that we can put some capital into, correct management course and stablize before we refinance it on a long term perm loan through HUD.

But this is how we do our multifamily- What works for everyone else out there in the BP community?

We are buying our multifamily developments (100+ units)

*50% cash/50% private note -6 mo-24 month time on the note (1.5% interest)
*Buying the LLC that owns the development
*stablizing & completing HUD required CapX

end: Refinancing through HUD 223F -83.5% LTV (stablized value), 30-40 arm, 3.5% interest, non-recourse. Our end financing takes a long time to close- but is well worth the wait.

I couldn't have said it better Karen- I think having tenacity is a huge asset in this business.

Thanks for the suggestion- would how would i find someone like this? I think the last time we raised outside investment capital (equity) was when my grandfather was still alive in the 90's. haha- Any suggestions would be welcome!