Jun 7, 2021
Michael explains the LARGEST and
COSTLIEST mistake he made in buying multifamily: mismatching his
mortgage debt with his business plan. The future is not clear- so
you must use past experiences to make future business decisions.
Michael thought choosing a longer-term fixed rate loan, with the
expectations of interest rates rising in the future, would be a
prudent business decision. Unfortunately, it was not. His loan was
10 years…but his business plan was to only keep the property for
3-5 years. Rates remained low and the loan came with a significant
prepayment penalty called yield maintenance when they went to sell
the apartment building. If he had chosen a shorter loan term with a
less onerous pre-payment penalty… he would have saved millions. HE
WON’T DO THAT AGAIN!
Are you interested in learning more about how Multifamily Syndications work? Please visit www.spiadvisory.com to learn more about Michael Becker’s Real Estate Syndication business with SPI Advisory LLC.
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