Developer · Point Pleasant Beach, NJ · Member since 2015 · 303 posts · 216 votes
I find you can learn a lot reading annual reports of Multi-Family REITs. I came across a company that purchased all of their properties for a discount by paying all cash and using a line of credit that they had with a major bank. Then they would re-finance out after closing. Is this something that anyone has heard of being available for private companies or is it just for public companies? I spoke to somebody at one of the big investment banks who said it may be likely once you hit 100 million in assets and was just wondering if any of the larger players on this site have ever utilized a line of credit secured by future purchases?
Rental Property Investor · La Quinta, CA · Member since 2014 · 1k+ posts · 779 votes
7y
It sounds like the line of credit was not supported by the future purchase in the case you detail, but rather by ongoing operations, although I admit it's not entirely clear.
There are certainly banks that will enable you to buy multiple properties with one blanket mortgage, but that will likely not eliminate the need to have each of them individually appraised and go through normal underwriting steps.
Developer · Point Pleasant Beach, NJ · Member since 2015 · 303 posts · 216 votes
7y
@Andrew Mugo, I most recently read UMH Properties - they do mobile home parks, Condor Hospitality - limited service hotels, and Preferred Apartment Communities (APTS), my personal favorite multifamily REIT.
New York City, NY · Member since 2017 · 30 posts · 8 votes
7y
Earlier in my career I worked for one of the large SFR REITs that emerged in the aftermath of the GFC.
We made acquisitions using a $1bn secured line of credit at ~70% LTC and after reaching enough volume would securitize those homes at ~75% LTV.
The products from CoreVest and other similar lenders will be most similar to that strategy. Alternatively, if your business/portfolio can stand on its own well enough financially a bank might issue you a general unsecured LOC at a higher rate which wouldn't have LTV/LTC constraints.