All Forum Posts by: Tim Milazzo

StackSource is building the commercial real estate financing platform of the future. To accomplish that, we’re building a team full of smart, driven people, both from traditional real estate finance roles and from tech, always aiming to hire people smarter than ourselves.

StackSource's core values are Transparency, Integrity, Innovation, and Own the Outcome.

Responsibilities

• Act as the primary point of contact for clients seeking financing for their commercial real estate transactions
• Prepare and review loan packages and related documents for submission to lenders
• Negotiate loan terms and conditions with lenders on behalf of clients
• Communicate regularly with clients and stakeholders to keep them informed of the progress of their financing transactions
• Attend industry events and networking functions to stay abreast of market trends and build relationships with potential partners and clients

Qualifications

• 3+ years of experience in commercial real estate finance, preferably in a commercial mortgage brokerage or loan origination role
• Strong understanding of commercial mortgage products and the underwriting process
• Excellent communication and presentation skills
• Ability to work independently and manage multiple projects simultaneously
• Bachelor's degree in finance, real estate, or related field (preferred)

Commission-based compensation based on performance, plus equity incentives. Our commission splits are public, see Levels.StackSource.com

In this scenario, you can use two separate residential mortgages, one for each property, if you buy them in your name, because each property is less than 5 units.

If you want one lender to provide one loan for the 8 units, you would need to use a commercial mortgage to finance it. The same would apply for any combination summing to 5+ units for one loan.

Introducing: !

We built this new tool for real estate investors and investment sales agents to easily size up potential real estate investments from commercial sales listings, without leaving the listing webpage.

Note that this tool is in beta testing, which means this is an early version. There may be some bugs and designs that need to be tweaked. There’s also a lot of functionality we still need to build in.

What does today’s version (v0.3) do?

Overlay financial analysis within a listing page

The extension runs the math between your purchase, income, and financing assumptions to show you an investment’s potential:

• Max loan amount
• Equity required to purchase
• Net cash flow
• Cash on Cash Return

Pulls up to date debt parameters from StackSource’s server

You choose a lender category (like Regional Bank, CMBS, or Freddie Mac Optigo), and receive today’s interest rate ranges, max leverage, and amortization options.

Works with Google Chrome

You can technically load the extension on any webpage by clicking on the StackSource logo from the Chrome browser toolbar. The overlay button will only appear on websites that the extension recognizes as a commercial property listing portal. This is only compatible with the Google Chrome web browser today, and you need to install the extension first (link at the bottom of this blog post).

If you find that the overlay doesn’t appear on a listing page you’re using, shoot us a note.

Ability to Share an analysis privately

Want to share your potential acquisition deal with a co-investor or someone else? Click Share and choose to either grab a live Share URL or send a link over email.

More features coming

Instant loan quotes!!

Starting with common agency multifamily loan programs like HUD 223(f) and Freddie Mac SBL, we'll roll out instant rate and loan amount quotes so you don't need to guess. Yes, we're talking about instant rate quotes!

Scraping listing data

“Scraping” is a common term for software engineers that means grabbing information from a webpage automatically. As a commercial real estate sales listing is rich with information about the property, and some of that information would be useful to grab and save without re-typing it all, we’ll teach the browser extension what information to grab from popular listing portals.

We’ve started with one portal that will already be scraped in V1 — open up a CREXi sales listing, click on the StackSource overlay button, and see that it will pull some of the information right off the page as underwriting assumptions.

Save deals to a pipeline

If you view a lot of potential investments, you may want to save the ones that look interesting after the initial analysis, and then update the status on those potential investment leads. In the future, we’ll support that by letting users save deals to a pipeline view, where they can see and manage all the deals saved.

Start a detailed pro forma underwriting in a click

This financial analysis in the extension can be considered a “napkin” analysis. That means, it’s a way to quickly identify deals that might be worth pursuing. It does not replace the need for a more detailed underwriting exploring the potential cash flows for an asset. For that, you’ll still need to use a full underwriting model.

Many real estate investors use spreadsheets (Microsoft Excel or Google Sheets) to analyze their investment opportunities, while others have made the switch to cloud-based underwriting platforms. In a future version, you’ll be able to click a button to generate a full pro forma underwriting model to work with, on your underwriting platform of choice, with details from the sales listing pre-loaded.

Support for more browsers

We know not everyone uses Google Chrome. Firefox, Safari, and whatever Microsoft is not calling “Internet Explorer” these days all have their fair share of users. Note that it takes quite a while to boot up a browser extension on a different platform, so if you’re impatient, just use Chrome to access the extension.

Ready to try it out?

You need to request access to the beta version (https://www.stacksource.com/browser-extension-beta-access), or by emailing [email protected].

Cash reserve and reporting requirements are increased almost everywhere. You won't see much flexibility on that from huge organizations like Fannie and Freddie. Some regional relationship banks and credit unions will have less red tape, but you need to work with the right ones or there's a whole other sort of risk.

As pointed out already, a 30 year mortgage is not an option for a 30 unit project. Here are the types of loans available for these kinds of deals:
- "Agency" Multifamily Loans - the two big government agencies that back small multifamily loans are Fannie Mae and Freddie Mac. 30 year amortization, typically 5-10 year term, non-recourse. The property must be 90%+ occupied, and the borrower must have experience and a net worth greater than the loan amount.

- Banks/credit unions - there's a wide variety of good and bad banks for commercial mortgage lending. Some can do 30 year amortization, but more often it's 20-25. Usually full recourse, 5 and 7 year terms (sometimes 10).

- Bridge lenders - for value-add plays, or borrowers that don't qualify for bank debt. The interest rates are higher, but the payments are interest-only for a 1, 2, or 3 year term.

Note that there's some more guidance to find the right loan provider on BiggerPockets.com/loans

@Jag C. - right. And this is one of those points you want to clarify right up front with the lender, and potentially negotiate. Not that you can necessarily get them to take away the reserve requirement, but it should be really clear under what conditions that reserve account is released.

StackSource CEO Tim Milazzo interviews two retail experts:

Will Young, President of the National Retail Group at Bull Realty

Joe Lee, Co-founder & CEO at Locate.ai

Join online on Youtube at 2PM ET. Comment live on Youtube or Facebook to have your questions answered by the experts!

Hey @Michael H. - A couple of things to consider here.

First, the maximum LTV of a commercial loan for retail during normal times is 75%. Today, with the coronavirus pandemic, retail closures, and banks facing serious uncertainty in the economy overall and with retail in particular, expect LTVs will be much lower. 60-65% is a better benchmark for bank financing. More experienced sponsors may get more on a killer deal.

Second, don't count on being able to find a second lien lender for small retail properties, especially in this market. Mezz lenders are looking for larger deals. You may find some local hard money contact to go in with you, but the rate and fees will be huge.

First-time borrowers asking for money for retail right now is not a recipe for success. Look to partner up with someone with a track record and a larger wallet if at all possible.

@Kyle Shepherd - you may be talking to a less informed loan officer. You can get a residential mortgage on rentals. Maybe you should chat with a good resi mortgage broker.

What @Kerry Baird said, 5+ units and you're in commercial loan territory. You're also in commercial territory anytime there's a retail/office component mixed in with apartments (any number). Then the amortization can still be 30 years, but the loan term will typically be 5, 7, 10. There are some 30 year fixed commercial lenders, but they are higher rates.