Who will lend on 2000+ unit portfolio

15 Replies

Trying to find a good lender in the Houston area for a 2,000+ unit portfolio and 100MM+. Does anyone know some good lenders? Thanks

Originally posted by @Brad Lowery :

Trying to find a good lender in the Houston area for a 2,000+ unit portfolio and 100MM+. Does anyone know some good lenders? Thanks

 Fannie and Freddie?

Yes we are trying to get either one at 80% LTV

Hi @Brad Lowery , Is the loan size $100MM+ or the sale price? I have some that we've done $50MM+ loans with this year with in Pennsylvania, I'm not sure if they reach out to Houston but i'm happy to check tomorrow.  Would you mind emailing me the OM if you have it?  

sounds like insurance company maybe a fit.. or Colony

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I don't believe someone trying to take down a 2000 unit portfolio should be asking that question...

@Mark Allen   If they have the appropriate down payment it is a good time to ask.  Of course, I am not sure @Brad Lowery gave enough information.  I am wondering what percentage of these properties are hurricane damaged.  There will be a huge difference if you talking about 5% needing repairs or 95% needing repairs.  I would suggest going local money if you are doing a huge amount of repairs.  Yes... everything is bigger in Texas there are sources of financing in Houston that can do a $100,000,000 line of credit to get the repairs done and then move into a standard mortgage.

If Brad wants to give more information maybe we could be more help.

@Michael Biggs You're incorrect about just having the "down payment". We have a $51mm property under contract in Houston and every buyer that I brought to that deal knew their capital stack because they had experience taking down properties of that size. Commercial debt is far from just having a down payment.

@Mark Allen I did not mean to suggest that anyone with the down payment could get the financing.  I meant do not bothering to ask if you do not have it.

I have been the registered agent of a company that had a $100,000,000 line of credit from a private equity firm in Houston.  So I know a fair amount about getting financing.  I also know what it is like when they come collecting but that is another story.  LOL

He has not even told us what he has in mind to do with the 2000+ units.  If he is planning on a buy and hold and they are 98% rented, and he plans on agreeing to keep the management for the next several years, and he has enough reserves, and his partners have the experience of owning large complexes and he is not in a hurry it should all work out fine.  LOL

@Michael Biggs I think what @Mark Allen meant is that if your the front runner on 100MM deal, you've done a few deals before and you already know who/which lenders will fund a deal this size...

Originally posted by @Mark Allen :

I don't believe someone trying to take down a 2000 unit portfolio should be asking that question...

 Agreed

What is the average/typical building size of the portfolio? I'm obviously biased but you should contact a good commercial loan broker for a deal that size, especially if you are asking this question. Depending on a few factors, there are probably better options other than Freddie/Fannie and Colony. Good luck with the deal. 

Houston - is the property damaged? Is this a repositioning play? What does the Capex needed look like?

2000 Unit Multifamily - how many are occupied? What's the NOI or Cap Rate?

Brad's team - how much equity is being brought to the table? Do you have other assets in Texas? Have you asset managed multifamily at that scale? 

The answers to the above question will fork the answers in different directions.

If stabilized, strong track record, not much capex: insurance companies, Fannie/Freddie, major banks, HUD

If repair/transitional: Major bridge lenders, debt funds, certain banks

If no track record or not enough equity: good luck

I can finance that loan. If he puts 99% down and he is willing to pay me 10%.

You haven't supplied any information. 

In-Place NOI?

Purpose? (Coupon clip? Repositioning?)

Term? 

Why 80% LTV? (At a deal of this size and price point you're going to have alot of institutional guys willing to put out patient capital expecting stable but moderate returns. Also unlikely you'd get a Fannie Mae 80% LTV if the properties are decent as the debt yield wouldn't pass muster.)

$50k/door seems suspicious for the portfolio, why is it such a low price per unit?

Which Houston submarkets?

Again, you gotta supply alot more information before anyone can direct you to the right people. DM me if you actually want some referrals, I know some people at Meridian, Cooper Horowitz and Madison Realty who should be able to get you sorted if this a real opportunity.

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