Jul 27, 2018
Your lender brings a huge
amount of capital to your transaction. They are a critical member
of your success team. You need to understand what’s important to
the lender and how they will structure your loan. In today’s
podcast, we sit down with a few team members of Old Capital and
discuss what’s new in the capital markets and what you need to
know. Items discussed:
1. Fannie Mae Pricing Waivers- for the last few years, Fannie has
been generous in reducing their posted interest rates to good
clients. Today, Fannie Mae is not too anxious to offer lower
interest rates to new and inexperienced borrowers at the highest
loan leverage.
2. Term Sheets vs. Final Loan Commitment- Some lenders are not
fully underwriting the loan transaction upfront and issuing false
term sheets. They propose loan terms that are not even close to
what the final loan commitment will eventually be. Don’t fall for
that, always ask for your lenders underwriting analysis upfront and
find out how they view the transaction. Fannie’s underwriting
criteria is pretty much the same from DUS lender to DUS lender…so
term sheets should be very similar. If not, then look into their
underwriting.
3.During the loan process, be prepared to bring in additional equity if the seller does not increase the property’s NOI. Unfortunately, many sellers don’t realize that the buyer’s lender needs to see positive NOI during the loan process. Do not have the seller take their foot or the buyer will need to bring in additional equity to close.
4.Always ask for the sellers 5 YEARS- INSURANCE LOSS RUN upfront before you go hard with earnest money. You need to find out if the seller has filed any insurance claims against the subject property. One claim should not increase premiums…but several claims can push up insurance premiums and will reduce your loan amount significantly.
To receive our FREE 15 page WHITE PAPER REPORT on the 2018
FUNDAMENTALS OF MULTIFAMILY FINANCING 101 and to learn more about
upcoming events at Old Capital Speaker Series please visit us at
OldCapitalPodcast.com
Are you interested in learning more about how Multifamily
Syndications work? Please visit www.spiadvisory.com to learn about
Michael's Real Estate Syndication business with SPI Advisory
LLC.