Buying Apartment Building? Appraiser Tips!

ASK MIKE MONDAYS - I am under contract and buying an apartment building. I’ve been contacted by th...

oldcapitalpodcast oldcapitalpodcast | 5 years ago

A lender needs to understand the value of the collateral. Even though you paid for the appraisal, the appraiser is hired and works for the bank. They will not discuss value with the buyer until after they have completed their final report. If you meet the appraiser at the property and you mention that you are going to do some specific rehab; the appraiser will more than likely add that into their report. So…be careful in speaking to the appraiser, if you haven’t confirmed those improvements....

ASK MIKE MONDAYS: Michael, I am buying an apartment building, what due diligence items should the se...

oldcapitalpodcast oldcapitalpodcast | 5 years ago

ASKING and GETTING are two different things when dealing with a seller. Michael explains what critical financial and physical information you must ask the seller to produce before your earnest money is at risk. Make sure you download Michael’s “DUE DILIGENCE CHECKLIST” at the Old Capital Podcast website at OldCapitalPodcast.com. This CHECKLIST gives you the best breakdown of items you need to review.

ASK MIKE MONDAYS - Michael, I am thinking of buying a $1 million apartment building and should I put...

oldcapitalpodcast oldcapitalpodcast | 5 years ago

Michael gives an example on apartment loan structuring and what you should consider BEFORE you lock yourself in with a future large prepayment penalty. When you are buying your first apartment building and it qualifies for a long term Freddie Mac loan, you may want to consider additional financing options if you are thinking of selling within the next 5-7 years.

ASK MIKE MONDAYS - Can I get a loan on an apartment building; if I am not a US CITIZEN and live over...

oldcapitalpodcast oldcapitalpodcast | 7 years ago

It can be done. Mike explains the additional complexity and underwriting rules for foreign nationals to finance apartments in the US.

ASK MIKE MONDAYS - Do I need a buyer’s broker when acquiring an apartment building?

oldcapitalpodcast oldcapitalpodcast | 5 years ago

Buyer brokers are not common in multifamily. If you are fairly new into apartment investing, you should have a buyer’s broker represent you. If you are a seasoned apartment buyer, buyer brokers are an extension of your team and will add value. They are out looking for specific transactions that meet your vision. As a general partner you should be focused on 1) raising new equity, 2) finding new transactions. Buyer brokers can assist you in finding the right transaction.

ASK MIKE MONDAYS - I want to a buy an apartment building. What do I look for in the numbers?

oldcapitalpodcast oldcapitalpodcast | 5 years ago

Michael explains to a potential apartment buyer on what is important in the operating statement. Do you look at the trailing 1, trailing 3, or trailing 12? What is important? Michael talks about the importance of analyzing the trend line of income and expenses.

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 - After you get an apartment building under contract; now what? How do you determin...

oldcapitalpodcast oldcapitalpodcast | 7 years ago

ASK MIKE MONDAYS - Would you build an apartment building?

oldcapitalpodcast oldcapitalpodcast | 6 years ago

Michael gives reasons on why he would NOT build large apartments at this time.

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...