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3 Reasons to Refinance Your Multifamily Property Now

Debt is an integral part of real estate for most investors. There are a myriad of different strategies and schools of thought regarding debt and real estate. The purpose of this post is not to offer ideas on which approach is best, but to simply to offer 3 compelling considerations as to why it makes sense to take a hard look at your existing debt on your commercial multifamily real estate.

1. Interest Rates are Still Low, But on […]

Miami Real Estate

Understanding BSPRA on an FHA 221(d)(4) Loan

Raising equity in any real estate deal is a hurdle that must be successfully navigated to find success. Equity investors make many real estate deals possible when the equity requirements exceed the sponsors capabilities or risk tolerances. Conversely, increasing leverage means using less “raised equity” so the sponsor retains more profit and ownership.

Accessing the highest leverage percentages in the industry is very attractive to developers, because they want to preserve cash for their next project. This is usually one […]

Building in Financial District

What You Need to Know About Debt Service Coverage Ratios

Debt Service Coverage Ratio (DSCR) is an important constraint to understand when determining the leverage of your commercial multifamily loan.  In fact, it is likely the first thing that your lender will look at when determining your loan amount.  

What is the DSCR?  

Debt Service Coverage Ratio represents the amount of cash flow you have left over after expenses divided by your debt payments on the property. This is calculated on an annual basis.  Simply put, the […]

Real Estate Podcast Microphone

My Appearance as the featured Guest on The Real Estate Guys Radio Show Podcast

For years I’ve listened to Robert Helms and Russell Gray, the promulgators of the The Real Estate Guys Radio Show Podcast. It is, and has been the #1 downloaded podcast on real estate investing for quite some time now. They have built a large following of thousands of listeners by focusing their content on high quality real estate investing education.
They have had so many amazing guests over the years which have included Robert Kiyosaki, Steve Forbes, Donald Trump, Peter […]

Apartment Complex

What is MIP in HUD Multifamily Loans?

Mortgage Insurance Premium, commonly referred to and abbreviated as MIP, is something unique to FHA Multifamily loans. The Federal Housing Administration (FHA) is a division within the U.S. Department of Housing and Urban Development (HUD). The purpose of the FHA is to provide mortgage insurance on loans made by FHA-approved lenders throughout the United States.

FHA insures both single family and multifamily properties. In the multifamily commercial world these loans are commonly referred to as HUD loans. Technically, HUD is […]

Apartment-Store Front

How Can a Non-Recourse Loan Help You as a Real Estate Investor?

There’s a good chance you’re already familiar with the concept of a non-recourse loan, but to help illustrate it, let’s define its exact opposite—a recourse loan. Let’s say you take out a loan to buy a car. As a provision of the loan, the lender can require you to sign a personal guarantee upfront—also known as a recourse term. This allows the lender to take possession of the car if you fail to make payments.

The same is true with […]

HUD Lending

What to Look for in a HUD Multifamily Lender

Every experienced multifamily investor knows that most commercial mortgages run for a 10-year term with a balloon payment due at maturity.  This sets the stage for needing multiple refinance transactions throughout the life of the loan until the property can be paid off, while continuing to generate maximum cash flow.  The cost and amount of effort to refinance every decade can be a significant use of resources over the life of the mortgage.

Look at recent history, and put yourself […]

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Avoid These 5 Pitfalls in Multifamily Investing

Investing in a commercial multifamily property can be an exciting opportunity with promising results.  In the right market, it can be a goldmine, but there are five common mistakes that keep investors from maximizing the return on their investment.  Do you know how to identify and avoid these pitfalls before they hit your pocketbook?  Here are some tips we think you will find invaluable.

1.  Underestimating the Cost of Turning Units

Even if a multifamily commercial property is occupied, you may […]