The Old Capital Podcast is aimed at Real Estate Investors - both new and experienced.
Hosts Michael Becker and Paul Peebles deliver no-hype education and expert perspectives.
You will gain valuable insights from interviews with actual real life investors who are active in acquiring and operating apartment complexes. You will discover how they are identifying, financing and operating apartment complexes, as well as helpful advice on how to get started and avoid common mistakes.
Wow! When trying to buy an apartment building… don’t fall into some rabbit holes. Pursuing single family MARKETING strategies do not typically work when trying to FIND a multifamily property. Michael explores some common marketing fallacies of transitioning from SINGLE FAMILY to MULTIFAMILY.
Your lender brings a huge amount of capital to your transaction. They are a critical member of your success team. You need to understand what’s important to the lender and how they will structure your loan. In today’s podcast, we sit down with a few team members of Old Capital and discuss what’s new in the capital markets and what you need to know. Items discussed:
1. Fannie Mae Pricing Waivers- for the last few years, Fannie has been generous in reducing their posted interest rates to good clients. Today, Fannie Mae is not too anxious to offer lower interest rates to new and inexperienced borrowers at the highest loan leverage.
2. Term Sheets vs. Final Loan Commitment- Some lenders are not fully underwriting the loan transaction upfront and issuing false term sheets. They propose loan terms that are not even close to what the final loan commitment will eventually be. Don’t fall for that, always ask for your lenders underwriting analysis upfront and find out how they view the transaction. Fannie’s underwriting criteria is pretty much the same from DUS lender to DUS lender…so term sheets should be very similar. If not, then look into their underwriting.
3.During the loan process, be prepared to bring in additional equity if the seller does not increase the property’s NOI. Unfortunately, many sellers don’t realize that the buyer’s lender needs to see positive NOI during the loan process. Do not have the seller take their foot or the buyer will need to bring in additional equity to close.
4.Always ask for the sellers 5 YEARS- INSURANCE LOSS RUN upfront before you go hard with earnest money. You need to find out if the seller has filed any insurance claims against the subject property. One claim should not increase premiums…but several claims can push up insurance premiums and will reduce your loan amount significantly.
To receive our FREE 15 page WHITE PAPER REPORT on the 2018 FUNDAMENTALS OF MULTIFAMILY FINANCING 101 and to learn more about upcoming events at Old Capital Speaker Series please visit us at OldCapitalPodcast.com
Are you interested in learning more about how Multifamily Syndications work? Please visit www.spiadvisory.com to learn about Michael's Real Estate Syndication business with SPI Advisory LLC.
You may have to look at several apartment opportunities BEFORE you find the right one. The ability to underwrite a transaction quickly will help you make swift decisions on whether to pursue with additional analysis time or drop the deal. Mike discusses the specific documents the seller needs to provide you to analyze the transaction correctly.
Trying to acquire an apartment building today can be challenging in this hyper competitive market. Perhaps you need an alternative property type to consider. In today’s podcast we explore industrial warehouse investing. Tim Veler is an industrial warehouse sales & leasing associate with Transwestern in Dallas. He assists investors in buying industrial warehouse properties. Industrial warehouse tenants can be furniture manufactures, printers, import’ export distributors, fabricators, logistic companies. As the landlord of an industrial warehouse building; you typically have less tenants and longer leases. Tim describes the similarities and differences with owning an industrial warehouse property to an apartment building. Listen to what is important in industrial warehouse investing.
To contact Tim Veler: timothy.veler@transwestern.com
To receive our FREE 15 page WHITE PAPER REPORT on the 2018 FUNDAMENTALS OF MULTIFAMILY FINANCING 101 and to learn more about upcoming events at Old Capital Speaker Series please visit us at OldCapitalPodcast.com
Are you interested in learning more about how Multifamily Syndications work? Please visit www.spiadvisory.com to learn about Michael's Real Estate Syndication business with SPI Advisory LLC.
A lender needs to understand the value of the collateral. Even though you paid for the appraisal, the appraiser is hired and works for the bank. They will not discuss value with the buyer until after they have completed their final report. If you meet the appraiser at the property and you mention that you are going to do some specific rehab; the appraiser will more than likely add that into their report. So…be careful in speaking to the appraiser, if you haven’t confirmed those improvements. The appraiser is going to need the most updated T12 and a current rent roll. They may want to see your PROFORMA on the new property taxes and other expenses and make sure that it looks reasonable.
A few years ago, Ed Faulkner bought a new house for his growing family to live in. The day after they moved in…his wife informed him that she HATED the house and wanted to move. Yikes! Instead of selling they rented it out. That was his first experience with owning rental real estate. He was terrified with having someone else live in their home. After a while, he got comfortable with owning rental real estate and bought a duplex. He eventually sold it and realized a large gain. He was hooked. He wanted to buy more units. Ed wanted to start with small steps in buying rental property. With a partner, he bought a 10 unit building. He has learned a lot in a short period of time. His biggest lesson is BIGGER IS BETTER in MULTIFAMILY. He learned that economies of scale were important in multifamily. His next transaction was a much bigger property with 44 units. Ed’s journey is typical of many real estate investors…he took baby steps from a single family rental , then a duplex, to a 10 unit, and now… 44 units. Could you do this?
To contact Ed Faulkner: ED@HZFProperties.com
To receive our FREE 15 page WHITE PAPER REPORT on the 2018 FUNDAMENTALS OF MULTIFAMILY FINANCING 101 and to learn more about upcoming events at Old Capital Speaker Series please visit us at OldCapitalPodcast.com
Are you interested in learning more about how Multifamily Syndications work? Please visit www.spiadvisory.com to learn about Michael's Real Estate Syndication business with SPI Advisory LLC.
Buyer brokers are not common in multifamily. If you are fairly new into apartment investing, you should have a buyer’s broker represent you. If you are a seasoned apartment buyer, buyer brokers are an extension of your team and will add value. They are out looking for specific transactions that meet your vision. As a general partner you should be focused on 1) raising new equity, 2) finding new transactions. Buyer brokers can assist you in finding the right transaction.
