Hard Money Lending on Apartment

[Travis Limbocker]

Good morning BP,

Wanted to get a fresh discussion going on hard money lending (HML) specific to large MF apartment properties.

To date, I've acquired < 10 unit MF properties using a mix of traditional financing and 100% seller financing. Like most novice investors living in the Bay Area, we're "forced" to find creative ways to finance larger properties due to the barriers to entry (i.e. capital on hand) l in our local area. So I've turned my focus to educate myself on HML.

I wanted to get some feedback from HM folks, particularly in the West Coast markets on what we could expect to see with rates, terms, fees, etc.. for larger (20+) apartment purchases. For some context, and to give you would-be advisors a bit more detail, here's a brief summary of our investment strategy:

• Focus is on purchasing 20-100 unit apartment complexes
• Our strategy isn't ground-breaking or substantially unique; we simply look for properties with long-term owners and usually a good chunk of deferred maintenance, in the $1m-1.3m (list) range, that we can BRRRR
• These properties typically need a good amount of cosmetic work and are under-performing for the area
• If we CAN'T acquire via seller financing, we're typically staring at a 20-25% down traditional loan + the cost of rehab, which is typically $75-$100k+
• With these properties, we're looking to bring up to market rents within the first 12 months
• Net of it, we COULD need to borrow between $200k-$400k

So for some of you hard money lenders out there, or folks who've used HML to finance these types of asset, what could I expect in terms of lending terms, rates, fees, etc..?