Investor · Fort Plain, NY · Member since 2016 · 4 posts · 0 votes
Hi everyone, I'm looking to purchase 20+ unit multis and need recommendations for commercial agents in the upstate area of NY ranging Albany to Utica. I have a few great residential agents that I work with but don't feel they possess the knowledge for more complex deals. Familiarity with the necessary due diligence regarding the finer points of HUD contracts, USDA financed properties and potential pitfalls would be very helpful!! Lawyer in place, just need agent. Thx.
Denise Bagramian at Exit Realty has a lot of commercial experience. I've worked with her making some offers and liked working with her, though didn't end up closing on anything. bagramian23 at gmail.com.
Talk to her and see if she sounds like she has the background in HUD that you need. Tell her I sent you.
I think you might be better served by talking directly with a lender that originates FHA and USDA deals, since they are the ones that will ultimately bring the package for insurance into those agencies. In terms of due diligence, for example, for an acquisition FHA under Section 223(f) you would be looking at an Appraisal, Phase I Environmental Assessment, Capital Needs Assessment (depending on the age of the property it might include Asbestos and Lead Paint testing) and Radon testing (where applicable). All of those reports will need to be ordered by the lender, so as not to create a conflict of interest.
In terms of the contracts, unlike for the single family residential there is no set contract, however, there is significant paperwork requirement and various HUD applicable forms that need to be executed.
The biggest pitfall is that an FHA transaction takes longer to close than a Portfolio, Fannie Mae or a Freddie deals, since due diligence is much more extensive in regards to you and the property. This is due to the fact that since unlike most other lenders FHA loans are fully amortizing for up to 35 year terms, so the goal is to ensure that property is still going to be there 30 years from now and cash flowing. In exchange for that you get higher leverage (85% LTV, min 1.17 DSC) and a rate that is probably lower than for you own personal residence. The summation above is just a brief version of pros and cons, an experienced lender will be able to walk you through those.