Bridge lenders for Multi-Family, what are my best options?

Question

Hi,

I'm with a small group of investors that currently own 23 doors spread across 10 Multi-family units. We have been expanding in the areas around Cleveland in the last year and we have observed goo return on our stabilized inventory, so we are looking to keep expanding.

Our biggest pain point to keep scaling has been financing; we have deploy a variety of financing options (personal mortgage, commercial finance, cash and refinance, etc.) but the process has been generally slow. We have particularly struggled to find bridge lenders and commercial lenders for multifamily.

I thought it might be a good idea to bring this up to the forum to see if any of y'all lovely people might have an idea/network that could help.

Thanks in advance :)

Carla Kordab · Answer

Congrats! My friend @Muhammad Amawi will be happy to help you

All the best,

Gerardo Waisbaum · Answer

Hi @Adriaan Sierra,

Congrats on the 23 units. That's a significant achievement.

I would recommend you to listen to a series of 4 episodes of the BP podcast dedicated to how to raise private money (episodes 636, 637, 654, and 655). You will learn how to raise money step by step including templates and scripts.

Private money is much cheaper and more straightforward and creates long-term relationships.

Good luck!

Michael Swan · Answer

Oh!! I forgot to say, these Freddie Loans are non-recourse.  That is another HUGE benefit as you get these Small Balance Freddie Loans!!! As you get larger, the risk is less!!

Any one out here, don’t be afraid to reach out to me.  I love talking shop!!

If you change the way you look at things, the things you look at change right before your very eyes!! It did for me.  It can do the same for you!!!

If I can do it, anyone can.  Change your paradigm, change your life.  I have been retired from my teaching job now going on my second school year.  Just focused on managing my 9 apartment complexes, refinancing a few, selling a few and acquiring a few.

We are only limited by the self imposed limitations.  Reality is an illusion, albeit a constant one, it is in our face at every turn.

Make your own reality!!!!Swanny Podcast Guest 238

Adriaan Sierra · Answer

The last bridge lender we have talked was for a 20 unit MF opportunity. They had concerns as we have no previous experience in this space , which is a fair concern. They were generally helpful and provided some good feedback as to missing pieces for us to work in the future.

When we went commercial lending for refi of (~1.5mm) our closing took 90 days, which caused a couple of rate hikes. We went for the cheapest rate that we could find, which might have been a mistake, given how many hiccups we encountered.

I think part of the problem is that we are not at the size that you are describing. Our typical deals are on the [200k -1.5 mm] range.

I do believe this might be a cold start problem. With the right tools we would be able to scale better...

Adriaan Sierra · Answer

Thanks, this is something that we will consider in the future, but not quite ready for. Definitely worth the thought

Michael Swan · Answer

I use Brian Bruening at Bellweather out there.  I have done my last 3 Freddie Small Balance Loans with him on a 20 unit, and another loan on a 24 unit and another loan on a 21 unit in the last 18 months.  These Freddie loans have been amazing for us.  First 2 or 3 yrs interest only, 30 yr Amortization fixed rate, currently at about 5.5-5.6% fixed for anywhere from 7 to 10 years term.

He also does bridge loans too.  That is a different product altogether though.  The Freddie Small Balance Loan is the best loan out there.  Although you need a $1,000,000 loan balance or more.  I would reach out to Brian ASAP!!. All of my 9 apartment complexes are out there in the Cleveland area in suburbs called Painesville and Mentor, Ohio.  I also have a 24 unit in Akron.

Feel free to reach out to me too!! I love talking shop!!

Swanny (guest BP podcast 238).

Percy N. · Answer

@Adriaan Sierra what is the size and term of each loan you seek?

Bridge lenders will typically want to do $5mm+ (preferably 10+mm) for 2-3 yrs and these days provide 55 - 65% LTV.

There may be some lenders that do Bridge to Perm debt.

Bridge lenders typically take 60 days to close a first-time loan.

Have you asked the previous lenders why they did not approve you?

Another option is to speak with local credit unions or lenders who may be able to do a balance sheet loan.

If the loan in between $1mm to $5mm look into a Small Balance Loan.

Marty Johnston · Answer

There are options! Sending you a DM

Adriaan Sierra · Answer

I'll reach out. Thanks a lot

Adriaan Sierra · Answer

I have applied as both an entity and a person. I've had much more success with the latter.

Bridge lenders for Multi-Family, what are my best options?

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