Ask Mike Mondays: Pros and Cons of Assuming Debt vs. Getting a New Loan

ASK MIKE MONDAYS - Should you assume the current debt or get a new loan?

oldcapitalpodcast oldcapitalpodcast | 6 years ago

Today, many apartment sellers are giving apartment buyers two pricing choices. Many sellers have large prepayment penalties on their debt; so they give new buyers two prices. One, if they assume the sellers debt the cost will be lower. Two, if they force the seller to payoff their debt and occur a large prepayment penalty the cost will be significantly higher. Listen to Michael discuss the options.

ASK MIKE MONDAYS - How difficult is it to ASSUME a FANNIE MAE loan? What is a SUPPLEMENTAL loan?

oldcapitalpodcast oldcapitalpodcast | 7 years ago

A unique feature with a Fannie Mae loan is the ability to assume the existing loan from the seller and then apply for a new subordinated loan to get max leverage. Mike explains the additional benefits and needed structure of applying for a Fannie Mae assumption & supplemental loan.

ASK MIKE MONDAYS - Laundry income; should you own the machines or should you partner up with a laund...

oldcapitalpodcast oldcapitalpodcast | 7 years ago

Michael explains the upside and the downsides of either partnering with a laundry vendor or owning your own machines. Michael also talks about increasing your NOI with other non-rental income line items.

ASK MIKE MONDAYS - Can I get a LOAN PRE-APPROVAL on an apartment transaction?

oldcapitalpodcast oldcapitalpodcast | 6 years ago

Michael discusses what lenders are looking for when applying for financing on an apartment transaction. With apartment lending- the quality, condition and location of the asset are the most important factors in underwriting. A PRE-APPROVAL is not going to be available because 2/3rds of an apartment lending decision is based on subject property. The lender needs to have a complete picture on a number of critical underwriting variables. Examples: Where is property located and age? What are histo...

ASK MIKE MONDAYS - What are the TOP LOAN PITFALLS? Can you give me an example or two?

oldcapitalpodcast oldcapitalpodcast | 6 years ago

Michael explains some of the obstacles that may trip you up when applying for a commercial real estate loan. You have too much at risk- financial & reputation risk, not to understand some of the hurdles you may encounter.

ASK MIKE MONDAYS - Interest Only Needed? What you should expect

oldcapitalpodcast oldcapitalpodcast | 6 years ago

Interest only can certainly help the cash-on-cash returns on your investment. If you are purchasing a broken property- deferred maintenance, bad management, bad occupancy; you need some type of payment relief during times of weak cash flow. Having an interest only period during the renovation is certainly typical for a BRIDGE type of loan. Banks typically don’t like to do lots of interest only…because the bank regulators don't like interest only. Most community banks on bridge loans will onl...

Old Capital Real Estate Investing Podcast with Michael Becker & Paul Peebles: ASK MIKE MONDAYS: “M...

Nationwide Commercial Real Est... Nationwide Commercia... | 1 year ago

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 “green shoots.” 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...

ASK MIKE MONDAYS - Mike….I am a fairly new real estate operator….what should I do first?

oldcapitalpodcast oldcapitalpodcast | 3 years ago

Well….you need to find deals and find money! Building relationships with brokers, equity investors, contract attorneys, lenders, physical engineers, & SEC attorney should be your first course of action. Some folks may use LOOPNET to find their first deal and that is OK, but most SERIOUS BUYERS contact listing agents in the market. Don’t be a jerk…this is a small business and word will get around. Sound advice in any business. Michael Becker has purchased over 10,000 apartment units between...

ASK MIKE MONDAYS - When you buy a VALUE ADD apartment building; where should you invest your rehab d...

oldcapitalpodcast oldcapitalpodcast | 7 years ago

Old Capital Real Estate Investing Podcast with Michael Becker & Paul Peebles: ASK MIKE MONDAYS: “S...

Nationwide Commercial Real Est... Nationwide Commercia... | 1 year ago

Boy, it is hot out there! We know the outside air temperature is red-hot during a Texas summer; but is the apartment investing market starting to cool off- is a deep freeze coming? Mike confirms that the fundamentals of apartment ownership are still very strong. Great occupancy and good rental growth are still being observed with apartments… but the head winds within the capital markets- through higher interest rates and lower loan leverage- have made a few potential apartment buyers uneasy. M...

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ASK MIKE MONDAYS - Should you assume the current debt or get a new loan?

ASK MIKE MONDAYS - Should you assume the current debt or get a new loan?