Results for ‘Debt’ category

Getting a demand from a lender

I have an all-cash deal in escrow right now that’s being held up by escrow’s inability to get a demand from the existing lender. Since it’s irritating me, I thought I’d share the experience, so that you’re not surprised if/when it happens to you. First: What’s a demand? When a seller sells a property that

How low interest rates are changing the multifamily market

Had a quick conversation with a loan broker last night about the loans available on 5+ unit apartment buildings right now. You can now get a 5 year fixed, non-recourse bank loan for 3.62% interest. Let’s take a look at what that means by using the example of a 5% cap deal, which is a

Private lenders are out of their minds

Am looking at buying a small apartment building and using a 50% LTV loan to do it. Why do I need to borrow money, when I have a loads of cash committed to my fund from investors? Because I’m judged by my investors based on the annual return I generate for them. Because return is

One problem with leverage

Right now, with interest rates at historic lows, buyers are being tempted to use a lot of leverage when they buy apartment buildings. As we’ve discussed before, leverage magnifies outcomes, both good and bad. Today, I want to look at how one downside of leverage can manifest itself on larger apartment buildings. But you need

Are apartments still worth buying?

This period of sustained, low interest rates is driving every sane person out of cash and into hard, income producing assets. Why? Because, after inflation, keeping your money in cash right now is basically like lighting 1-2% of it on fire each year. This has been true since 2009, but I think most people are

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