All Forum Posts by: Account Closed

What will be the ARV?

@Alex Smith, for your case, it's better to do a portfolio loan which means refinance the three properties with one loan. This saves you origination fee which is just one time vs three times. And it's easier to get lower rate with a higher loan amount.

https://charlottereia.com/meet...

https://metrolinareia.com/even...

Check these two websites.

SBA 504 is for loan amount greater than $5MM. SBA 7(a) is for loan amount less than $5MM. You need to live in one of the units in order to consider as owner-occupied as SBA loan requires that.

The refinance part is in line with current commercial loan market, but not sure what the rate will be in year 3.

For >5 units apartment, lenders look at the NOI/debt service, this ratio needs to be greater than 1.25. Then look at the rent roll to determine the occupancy which needs to be at least 85%. After these two, then look at the borrower's credit and past experience.

Yes, once the project is done. You can refinance to long term loan. It will be based on the projected NOI.

@Faisal Mardas

Construction loan is different from stabilized multifamily loan. Construction loan is a short-term bridge loan. Usually 1-3 years depends on the project. It is evaluated by credit and more importantly, borrower's track record in the new construction business. As it is bridge loan and no income producing collateral, the interest rate and lender's points are usually much higher than stabilized multifamily loan.

@Mark Grozen-Smith, when it comes to Multifamily due diligence, looking at the expenses item by item on a monthly basis carefully and ask questions to the realtor is certainly necessary. This can help understand why this property perform well or poor and you can learn from it to avoid the mistakes and learn what they did well. Also looking at the rent collection on a monthly basis help you learn the tenants base, management lease strategies, etc. Hope my answer gives some hints.

In this case, the NOI will play an important role when assessing the loan. If the adu also brings income, commercial lenders will have more confidence to lend. @Fayçal Merdach