ASK MIKE MONDAYS - Michael, what is the state of the apartment market today and any pro-tips you can share?

Michael discusses the status of the capital markets that he is seeing as a deal sponsor. Today, to be rewarded with a lower interest rate, Agency lenders want to see energy or water savings by apartment owners and/or tenants. This year, Fannie Mae and Freddie Mac made a change that calls for borrowers using their green-lending programs to commit to saving 30% on their energy and water consumption, with half of that reduction having to be in energy use.

Episode 181 - ARE YOU NEW TO APARTMENT FINANCING? Listen to John Darrow explains the differences between the SMALL BALANCE Fannie Mae and Freddie Mac loans.

John Darrow is an underwriter with Red Capital. He specializes in SMALL BALANCE- AGENCY loans under $7 million for NEW apartment buyers. In some areas of the nation…they will lend up to 80% leverage. He explains the differences between NON RECOURSE apartment lenders Fannie Mae and Freddie Mac. These two AGENCY lenders are similar, BUT they have important differences that YOU need to understand. REMEMBER, Fannie Mae and Freddie Mac will only lend on historically stabilized apartment buildings. They are current cash flow lenders. They will NOT finance a distressed asset (low occupancy and low NOI). Longer interest rate term, higher leverage, and non-recourse are some of the benefits of using AGENCY financing for apartment investing.
You should be able to answer these questions:
What lender will include REHAB into their loans? Can you get a NON RECOURSE loan in a small town with 30 years amortization? Can you do a 10 year fixed with 10 years of INTEREST ONLY? Why are these apartment loans typically better than local bank loans? What type of prepayment penalty can I expect? Can I lock my rate upfront?
To receive our FREE page WHITE PAPER REPORT on the (updated) 2019 FUNDAMENTALS OF MULTIFAMILY FINANCING 101 and to learn more about upcoming educational 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 more about Michael Becker’s Real Estate Syndication business with SPI Advisory LLC.

ASK MIKE MONDAYS - Michael, how do you DE-RISK an apartment transaction?

Today, many sellers and listing agents require buyers to put a substantial amount of NON REFUNDABLE earnest money up front…BEFORE they do certain due diligence analysis. As you can imagine, the seller wants to make sure you are financially committed to the transaction without the risk of a future re-trade.
Michael explains how he gets comfortable on putting significant hard earnest money upfront on an apartment acquisition.

Episode 180 - Two TOP producing APARTMENT REALTORS give you insights on how to win a deal

Berkadia real estate brokers, Will Jarnagin and Michael Ware, have been selling apartments for over 15 years. They have a depth of knowledge to help you. Will gives us an insight on the Value Add apartment market in Dallas. He breaks the sources of capital into two categories: 1) purchases UNDER-$25 million 2) OVER- $25 million. Will tells us that there is more activity and more capital available for smaller transactions under $25 million today. The space above $25 million is usually institutional investors and that segment is a little thin with less activity. Michael discusses the oversupply of BRAND NEW- A CLASS apartments this year, but construction permits have dropped and we will see a reduction of new supply in the next few years. This means current rental concessions will fall in the next 18 months.
If you have never bought an apartment building or you are new to the market, Will & Michael gives us several tips on how to get recognized by a top producing brokers selling a deal. Also, Michael gives us his perception of where CAP RATES are at for CLASS- A, B & C apartment properties in Dallas. You will chuckle at his answer.

To contact William Jarnagin: Will.Jarnagin@berkadia.com
To contact Michael Ware: Michael.Ware@berkadia.com

To receive our FREE page WHITE PAPER REPORT on the (updated) 2019 FUNDAMENTALS OF MULTIFAMILY FINANCING 101 and to learn more about upcoming educational 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 more about Michael Becker’s Real Estate Syndication business with SPI Advisory LLC.

Episode 179 - “Old Real Estate Guys” established an INVESTMENT FUND to buy apartments

Bill Mara & Pat Poling have been business partners for over 30 years. These “old real estate guys,” operated a multi-billion dollar institutional real estate portfolio for about a dozen years and then made the move into large apartment investing. They saw the opportunity to invest into value-add & work force multifamily and wanted to have individual partners instead of institutional investors. Before they established an INVESTMENT FUND, Bill & Pat would raise equity capital on each transaction. They would find the deal first and then find the equity second. That can be burdensome…if you have too many due diligence items coming at you. You can go from ZERO to 100 miles an hour during the acquisition. Bill & Pat found a way to raise capital throughout the year…with an investment fund. They used their institutional investing background to create a possible better way to help in the capital raise.

To contact Mara Poling: https://marapoling.com/fund/

To receive our FREE page WHITE PAPER REPORT on the (updated) 2019 FUNDAMENTALS OF MULTIFAMILY FINANCING 101 and to learn more about upcoming educational 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 more about Michael Becker’s Real Estate Syndication business with SPI Advisory LLC.

Episode 178 - Second Quarter 2019: Apartment Loan Officer Roundtable

What’s WORKING or NOT WORKING…in the capital markets. Old Capital commercial loan officers-James Eng, Dave Walls and John Brickson discuss what is happening in apartment lending. Paul Peebles relays an important story about the possible financial impact of the “NEW” SOCIAL SECURITY ADMINISTRATION’s- NO MATCH letter verifying authenticity of your employee’s social security number. This could be challenging for the employee, the employer, and the tenant in your building. What happens to labor costs and apartment occupancy if undocumented employees lose jobs? John Brickson and Dave Walls chat about competitive advantages in buying apartment buildings today. James “the professor” Eng reminds us 1) expect rejection and learn from every ‘no’ 2) hire advisors like your life depends on it 3) you will have to do things- that don’t scale. Great insight from James.

Save the Date: 2019 Old Capital Conference - October 24-25 in Dallas, Texas

NPR Article on the NO MATCH LETTER: https://www.npr.org/2019/03/29/707931619/social-security-administration-plans-to-revive-no-match-letters

Contact: James Eng JEng@OldCapitalLending.com
Dave Walls DWalls@OldCapitalLending.com
John Brickson JBrickson@OldCapitalLending.com

To receive our FREE page WHITE PAPER REPORT on the (updated) 2019 FUNDAMENTALS OF MULTIFAMILY FINANCING 101 and to learn more about upcoming educational 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 more about Michael Becker’s Real Estate Syndication business with SPI Advisory LLC.