ASK MIKE MONDAYS - What does MIKE build into his underwriting for the potential rise in CAP RATES when he sells, considering we are at historic lows in interest rates and cap rates?
ASK MIKE MONDAYS - What does MIKE build into his underwriting for the potential rise in CAP RATES when he sells, considering we are at historic lows in interest rates and cap rates?
Michael gives some general rules of thumbs on how to โstressโ your underwriting for a future valuation on the exit.
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Michael gives some general rules of thumbs on how to โstressโ your underwriting for a future valuation on the exit.
Michael gives some general rules of thumbs on how to โstressโ your underwriting for a future valuation on the exit.
As you can imagine, with interest rates rising, many apartment investors have been pencils down. Investors are concerned with lower asset value & higher debt service. Is there any good news out there? What are some of the positive ideas that are occurring in apartment investing? Mike is starting to see some positive โgreen shoots.โ Mike discusses some of those encouraging thoughts on what he is seeing in apartment investing. Listen to the guy that has acquired over 14,000 apartment units. Ar...
As you can imagine, with interest rates rising, many apartment investors have been pencils down. Investors are concerned with lower asset value & higher debt service. Is there any good news out there? What are some of the positive ideas that are occurring in apartment investing? Mike is starting to see some positive โgreen shoots.โ Mike discusses some of those encouraging thoughts on what he is seeing in apartment investing. Listen to the guy that has acquired over 14,000 apartment units. Ar...
Mike gives us an update on what to expect when you are raising capital to fund a transaction. First- it was higher interest rates, Second- it was the seller and the buyer not knowing the current value of property because cap rates have expanded, And Now, its raising equity to fund a deal. Are there LPโs wanting to invest? Michael chats about how a typical capital raise is going today. Listen to the guy that has acquired over 14,000 apartment units.โจAre you interested in learning more about h...
Mike gives us an update on what to expect when you are raising capital to fund a transaction. First- it was higher interest rates, Second- it was the seller and the buyer not knowing the current value of property because cap rates have expanded, And Now, its raising equity to fund a deal. Are there LPโs wanting to invest? Michael chats about how a typical capital raise is going today. Listen to the guy that has acquired over 14,000 apartment units.โจAre you interested in learning more about h...
What happens first; raise the investors money or find a building? Or is it vice versa? Before you do either, you must understand what it takes to be the managing member (responsible party) to operate an apartment building. Michael explains how a deal syndication works and being transparent with your investing partners.
What happens first; raise the investors money or find a building? Or is it vice versa? Before you do either, you must understand what it takes to be the managing member (responsible party) to operate an apartment building. Michael explains how a deal syndication works and being transparent with your investing partners.
When you put an initial PROFORMA- you have to make ASSUMPTIONS on the initial market rents and operating expenses. Michael examines how he backs those assumptions up.
When you put an initial PROFORMA- you have to make ASSUMPTIONS on the initial market rents and operating expenses. Michael examines how he backs those assumptions up.
Top of the market (A+ institutional construction) is getting a little frothy in the urban core and suburban markets throughout the nation. Spread between the A property and C property is flatting on the cap rates. Coming out of the 2008 recession the Aโs recovered first and then the Bโs and Cโs followed. The cap rates between the different property types have compressed tremendously. Mike gives his insight on why his group is focusing on the โtop of the work force housingโ space.
Top of the market (A+ institutional construction) is getting a little frothy in the urban core and suburban markets throughout the nation. Spread between the A property and C property is flatting on the cap rates. Coming out of the 2008 recession the Aโs recovered first and then the Bโs and Cโs followed. The cap rates between the different property types have compressed tremendously. Mike gives his insight on why his group is focusing on the โtop of the work force housingโ space.
Michael gives reasons on why he would NOT build large apartments at this time.
Michael gives reasons on why he would NOT build large apartments at this time.
To promote affordable housing, some older properties may have an income restricted LURA. A LURA is a LAND USE RESTRICTION AGREEMENT. It runs with the deed. This recorded regulatory agreement may restrict the amount of rent you can charge a tenant, based on the tenantโs income. If you rehab a property and are expecting to increase rents to justify the costโฆa LURA may prevent you from being able to raise rents in the future. Make sure you ask the sellerโs agent if the property has a LURA.
To promote affordable housing, some older properties may have an income restricted LURA. A LURA is a LAND USE RESTRICTION AGREEMENT. It runs with the deed. This recorded regulatory agreement may restrict the amount of rent you can charge a tenant, based on the tenantโs income. If you rehab a property and are expecting to increase rents to justify the costโฆa LURA may prevent you from being able to raise rents in the future. Make sure you ask the sellerโs agent if the property has a LURA.
What is it and does every lender have that? Banks do not, Fannie and Freddie do! Freddie's is called Multifamily Green Advantage. Fannie's is called the Green Rewards Program. BOTTOM LINE: Older properties need to be more energy efficient; the agencies are incentivizing owners to change current usage by landlords and tenants of electric and/or water by 20%... if you are successful, your new loan may have a lower interest rate up to 33 basis points. Wow!!
What is it and does every lender have that? Banks do not, Fannie and Freddie do! Freddie's is called Multifamily Green Advantage. Fannie's is called the Green Rewards Program. BOTTOM LINE: Older properties need to be more energy efficient; the agencies are incentivizing owners to change current usage by landlords and tenants of electric and/or water by 20%... if you are successful, your new loan may have a lower interest rate up to 33 basis points. Wow!!
Michael discusses who represents the buyer and seller and who pays the listing agent. In todayโs HOT apartment marketโฆmost apartment listing agents WILL NOT share the sales commission with a buyerโs representative. Unlike the single family home market, where it is typical for the listing agent to share or split commission fees, most apartment listing brokers will not pay your agent representing you. If you have buyerโs agent in a buyerโs transaction, you will likely be paying that agen...
Michael discusses who represents the buyer and seller and who pays the listing agent. In todayโs HOT apartment marketโฆmost apartment listing agents WILL NOT share the sales commission with a buyerโs representative. Unlike the single family home market, where it is typical for the listing agent to share or split commission fees, most apartment listing brokers will not pay your agent representing you. If you have buyerโs agent in a buyerโs transaction, you will likely be paying that agen...