We’re working with a reader of this blog to secure our first-ever loan from Freddie Mac, a so-called agency lender, on a project we recently stabilized. Previously, our experience with loans has been with banks. Back when I was first starting out, every broker warned me to avoid the agency lender and stick to banks, … Continue reading “Agency vs. banks”
Category: Debt
A pretty large appraisal discrepancy
Apologies for the lack of posts these last couple of days. Today, I got word that an appraisal hit at the contract on price ($850,000) on a deal one of our agents is working on. That wouldn’t be such a big deal, except that another appraiser for a different bank recently appraised the exact same … Continue reading “A pretty large appraisal discrepancy”
Progress on the refi front
On Friday, a loan broker who reads this blog secured for us a letter of intent (LOI) from a bank for a refi of a project we just stabilized. We’re all-into the deal for just under $2.8MM and the LOI calls for the bank to loan us that amount via a cash-out refinancing. Now, going … Continue reading “Progress on the refi front”
What’s going on today
Just in case anyone thinks what we do is glamorous, thought I’d give you guys a sense for what I’m working on today. Am working on securing four different loans: Refi of a stabilized property so we can return ~70-80% of the capital invested to our investors Two bridge / construction loans One line of credit … Continue reading “What’s going on today”
An irritating refinancing issue
Have just begun the process of refinancing 201 N Ave 55, a 12 unit property we renovated and recently stabilized. Thought I’d share with you an irritating issue I’m running into, so that you aren’t surprised when it happens to you. Let me begin by giving you some sample numbers. These aren’t actuals for the … Continue reading “An irritating refinancing issue”
From whom should I borrow?
(Sorry for the obnoxious headline… my inner grammarian wouldn’t allow me to end a headline with a preposition.) Had a friend call me today asking that simple question. Turns out a broker has been pushing her to use a particular loan broker and my friend wanted to know if that was good advice or not. So, without … Continue reading “From whom should I borrow?”
The economics of buying a home in an improving neighborhood
You can now get regular financing on a house under $419,000 for up to 95% of the purchase price. These aren’t FHA loans with high mortgage insurance payments; they’re relatively standard bank loans. Thought I’d run the numbers on a standard, $350k house in an up-and-coming neighborhood to determine if it makes sense for renters to … Continue reading “The economics of buying a home in an improving neighborhood”
Where are interest rates going?
I have no idea and anyone who says they know for certain is either: A liar; or Should be trading interest rate futures on Wall Street That said, having a view on interest rates is pretty important in our business. Why? Because the price of income producing real estate is highly dependent upon the cost … Continue reading “Where are interest rates going?”
The problem with banks
I’ve been working on a simple bridge loan for a month. We bought the property all-cash and are capitalized with additional cash to fund the rehab (which has already begun). We paid $2,051,000 for the building and intend to spend another $700k renovating. I have asked a bank to provide the following loan: $1.2MM 5% … Continue reading “The problem with banks”
Avoiding a pretty painful “oops”
A reader wrote in to ask me a question about yesterday’s piece, which argued for refinancing and holding, rather than selling, completed repositioning projects. The question: “Only thing I don’t understand is why not refi on a LTV more than 60% to get back all of your original 2million dollars.” It’s a reasonable question. After … Continue reading “Avoiding a pretty painful “oops””