Investor · Apex, NC · Member since 2017 · 135 posts · 97 votes
My team is currently working on a project for a smaller (20 units) syndication deal. We were able to secure off market for a competitive price, but there is a good amount of capex work ($80k) needed at onset. After the $80k outlay, most of the major mechanicals will be good for the next 7-10 years. So if we sell at a premium with the market being so strong it would be turnkey to the new owner, but if we refi and hold we won't have to do any major capex repairs ourselves for that same timeframe. Financing terms are good initially with owner financing 5 year balloon, but with interest rates being so low considering refi'ing out in year 2 to lock in 7 year fixed at a low rate. Any advice suggestions appreciated!
Rental Property Investor · Cranford, NJ · Member since 2019 · 245 posts · 148 votes
6y
@John Blanton my goals and my investors goals are long term. If it’s a good property and not a managerial nightmare I would hold. Perhaps consider longer term financing. Again that’s just my objectives for goals.
Rental Property Investor · Cranford, NJ · Member since 2019 · 245 posts · 148 votes
6y
@John Blanton my goals and my investors goals are long term. If it’s a good property and not a managerial nightmare I would hold. Perhaps consider longer term financing. Again that’s just my objectives for goals.
My team is currently working on a project for a smaller (20 units) syndication deal. We were able to secure off market for a competitive price, but there is a good amount of capex work ($80k) needed at onset. After the $80k outlay, most of the major mechanicals will be good for the next 7-10 years. So if we sell at a premium with the market being so strong it would be turnkey to the new owner, but if we refi and hold we won't have to do any major capex repairs ourselves for that same timeframe. Financing terms are good initially with owner financing 5 year balloon, but with interest rates being so low considering refi'ing out in year 2 to lock in 7 year fixed at a low rate. Any advice suggestions appreciated!
It all depends on your goals. If you can refinance the property and pull all or most of your cash out and the property still covers itself that may be the way to go but you most likely will not be left with much cashflow but will be paying down the loan so equity will continue to build.
Investor · Murfreesboro, TN · Member since 2013 · 430 posts · 178 votes
6y
@John Blanton I just sold a syndication 4 years early because we crushed our returns, double expected IRR in two years for what we expected in year 6. That said it was also because a great comp went on market and sold and I didn't feel in four years I would have another. Also with the market how it is I had to look at both sides of what would be downside to hold and that was a lot heavier than selling now. I am putting another property for sale now too with same variables. Hard part is there is limited options to move into