All Forum Posts by: Sean Myers

Wow, I'm impressed by the power of Bigger Pockets once again. I jumped on this thread to see if I could post something to help Dennis out in finding investors for multifamily syndication. Turns out that the community has already covered his question AND provided the opportunity for me to learn some new tactics, too!

@Chris Tracy - great response and I've already started contacting the Total Wine location down here in Orlando. Cheers!

@Anita Ahuja,

We typically see a 7% or 8% pref and a 70%-30% split offered. Your sponsor should have a platinum track record of stellar deals if they can raise on such good terms.

I just posted about betting on cap rates on another thread. You can see it in my profile. Hope that helps.

Excellent points have already been made in this thread. However, the exit cap rate issue seems to be left outstanding. 

To be conservative, the exit cap rate should be HIGHER that the entry cap rate. Unless there is a significant change that improves the quality (not quantity) of the assets NOI. Or you are making a call on the market direction.

You can partition the total return to analyze how much is attributed to cash generated during the hold period and how much is due to gain on sale. To me, it's always easier to project what NOI will be next year rather than what cap rates will be in 3, 5, or 7 years. So I lean towards deals that offer good current CASH returns and pay less attention to IRR or total returns.

You can find lots of information about cap rates for your market in particular. I like the fundamentals of Sacramento, but not sure how much I'd want to bet on cap rates continuing to go lower. 

Below is a chart with national ave cap rates for MF. They have been going down. But would you rather bet they continue to go down or revert back up towards the long-term mean of 6.5%?

Hey Ray, sounds like you have the first 5 years fixed at 5.5%, and then it's an ARM after that. But in this case the ARM only resets once every five years.

The 3.5% margin will be added to the index (5-yr treasury rate in this case) to determine your loan rate for each adjustable period.  

You should ask to clarify that the rate is fixed for the whole duration of each new five year period.

You might want to examine historical and predicted 5 yr treasury yields to get an idea of what your rates could be after the 3.5% margin is added.

Hey Gary, does this portfolio generate enough CF to pay the 8% pref on a current basis?

Hey Andy, our PM company uses Appfolio. We made the switch from Excel and Quickbooks quite a few years ago. 

It's a great solution and will do even more than solve the problems you are trying to fix now. I think the pricing is $200 per month for the first 200 units. Reporting, ACH payments, online maint order tracking, tenant portal, rental advertising, and more. Our staff loves it. (And I don't get paid to promote it, btw!)

@Lennon Lee You are right -- great little thread on multifamily direct mail. Probably the three most important components are of a mailing are:

1. Your Target List Criteria - Know what potential seller and property types fit with your program and capabilities.

2. Consistent Mailing - One and done won't work well. Sending consistently to a smaller targeted list is better than a single wide shotgun blast. You will build up awareness in the target's mind and you are more likely to be in the mailbox (or at the top of the file folder) when they finally decide it's time to sell.

3. Follow Up - Once you get a response, if you can't make a deal, then keep up with regular personal follow up contact. They may be early in the process, so this is your chance to build a relationship and be the one they pick to work with first on a sale. Track in a CRM and use little light touches with email, phone, and personal letters.

Everyone seems to sweat the "form" and "messaging" of the mailer. (I admit, I do too!) But I think that's actually not as important as the three points above. There are plenty of examples available of how to do the physical piece and what to say. Just select and send -- then track the results.

Come meet up with other Orlando area real estate folks at our casual networking/group discussion event.

This is an opportunity to share your interests, skills, goals and challenges with like-minded individuals. Be prepared to introduce yourself, give or share advice, and meet new people.

This event is FREE and designed to be a collaborative & open discussion, but please no pitching of deals or services during the event.

We're limiting the available free passes to 25 people, in order to provide ample opportunity for each attendee to participate.

Get your Eventbrite Pass Here

FAQs

What are my transportation/parking options for getting to and from the event?

Free parking in the building lot. Suite 101 entrance door is directly from the parking area.

What can I bring into the event?

Bring business cards, if you like for networking- but please, no pitching of deals or services to the group.

Hi Nili,

I don't think you need to take a "regular" loan to pay off the seller note and then get a mortgage note. That sounds like two loans with more possible costs.

If I understand your question & objectives, then I think you would just do a cash-out refinance. That would pay off the seller note & the balance of net loan proceeds would go to you. (By they way, cash-out loans usually requite lower LTV's that acquisition loans - maybe 60-65% depending.)

Contact a good mortgage company or mortgage broker in your area & they can give you the loan options and estimates costs.

Best regards,

Sean

2017 Multifamily Forecast by Freddie Mac video.

Freddie Mac Multifamily 2017 Economic Outlook

Multifamily market is looking good for Orlando, Tampa, & Jacksonville in 2017. Continued, but moderating rent growth. Strong employment gains - especially for Orlando!

What other market are you interested in following?