All Forum Posts by: Adriaan Sierra
Adriaan Sierra has started 5 posts and replied 57 times.
Post: Bridge lenders for Multi-Family, what are my best options?
- Investor
- Cleveland
- Posts 58
- Votes 41
Quote from @Percy N.:
@Adriaan Sierra what is the size and term of each loan you seek?
Bridge lenders will typically want to do $5mm+ (preferably 10+mm) for 2-3 yrs and these days provide 55 - 65% LTV.
There may be some lenders that do Bridge to Perm debt.
Bridge lenders typically take 60 days to close a first-time loan.
Have you asked the previous lenders why they did not approve you?
Another option is to speak with local credit unions or lenders who may be able to do a balance sheet loan.
If the loan in between $1mm to $5mm look into a Small Balance Loan.
The last bridge lender we have talked was for a 20 unit MF opportunity. They had concerns as we have no previous experience in this space , which is a fair concern. They were generally helpful and provided some good feedback as to missing pieces for us to work in the future.
When we went commercial lending for refi of (~1.5mm) our closing took 90 days, which caused a couple of rate hikes. We went for the cheapest rate that we could find, which might have been a mistake, given how many hiccups we encountered.
I think part of the problem is that we are not at the size that you are describing. Our typical deals are on the [200k -1.5 mm] range.
I do believe this might be a cold start problem. With the right tools we would be able to scale better...
Post: Bridge lenders for Multi-Family, what are my best options?
- Investor
- Cleveland
- Posts 58
- Votes 41
Quote from @Gerardo Waisbaum:
Hi @Adriaan Sierra,
Congrats on the 23 units. That's a significant achievement.
I would recommend you to listen to a series of 4 episodes of the BP podcast dedicated to how to raise private money (episodes 636, 637, 654, and 655). You will learn how to raise money step by step including templates and scripts.
Private money is much cheaper and more straightforward and creates long-term relationships.
Good luck!
Thanks, this is something that we will consider in the future, but not quite ready for. Definitely worth the thought
Post: Can I cash flow at 5% down?
- Investor
- Cleveland
- Posts 58
- Votes 41
At the numbers that I have seen you would not be able to cashflow at anything below 10%.
With such a low down payment you would need to buy insurance that would eat your margin up.
Anything below 20% gets tricky.
Post: Bridge lenders for Multi-Family, what are my best options?
- Investor
- Cleveland
- Posts 58
- Votes 41
Quote from @Carla Kordab:
Quote from @Adriaan Sierra:
Hi,
I'm with a small group of investors that currently own 23 doors spread across 10 Multi-family units. We have been expanding in the areas around Cleveland in the last year and we have observed goo return on our stabilized inventory, so we are looking to keep expanding.
Our biggest pain point to keep scaling has been financing; we have deploy a variety of financing options (personal mortgage, commercial finance, cash and refinance, etc.) but the process has been generally slow. We have particularly struggled to find bridge lenders and commercial lenders for multifamily.
I thought it might be a good idea to bring this up to the forum to see if any of y'all lovely people might have an idea/network that could help.
Thanks in advance :)
Congrats! My friend @Muhammad Amawi will be happy to help you
All the best,
I'll reach out. Thanks a lot
Post: Bridge lenders for Multi-Family, what are my best options?
- Investor
- Cleveland
- Posts 58
- Votes 41
Quote from @Erik Estrada:
Quote from @Adriaan Sierra:
Hi,
I'm with a small group of investors that currently own 23 doors spread across 10 Multi-family units. We have been expanding in the areas around Cleveland in the last year and we have observed goo return on our stabilized inventory, so we are looking to keep expanding.
Our biggest pain point to keep scaling has been financing; we have deploy a variety of financing options (personal mortgage, commercial finance, cash and refinance, etc.) but the process has been generally slow. We have particularly struggled to find bridge lenders and commercial lenders for multifamily.
I thought it might be a good idea to bring this up to the forum to see if any of y'all lovely people might have an idea/network that could help.
Thanks in advance :)
Hey Adriaan,
When you applied for any of your previous Commercial, Bridge, and Residential loans, did you apply under an entity?
I have applied as both an entity and a person. I've had much more success with the latter.
Post: Bridge lenders for Multi-Family, what are my best options?
- Investor
- Cleveland
- Posts 58
- Votes 41
Quote from @Marty Johnston:
Hey Adriaan!
First of all, congrats on your 23-doors! Woot! There are a lot of different strategies out there to move quick, depending on your goals and appetite. There are bridge lenders out there who can close in 2 weeks on small-balance MF like what you might be seeing there in Cleveland, ranging up to 80% LTV. But when you say bridge, and you also referring to Bridge+Rehab then BRRRRing out your forced appreciation? The refinances as your pointed out, can in fact be the slow point, but 21-28 days is very feasible with the right lending partners. What might you consider "slow" for your process?
Thanks!
We would be interested in Bridge Rehab with the intention to hold.
I have a working relationship with FFL so we can close fairly quickly on refi - mortgages, my biggest pain point at the moment has been commercial lending.
Post: Rezoning triplex into a quad in Parma Ohio.
- Investor
- Cleveland
- Posts 58
- Votes 41
The property is technically a triplex, not a quad. So I'm not sure if that will create hiccups in the future
Post: Bridge lenders for Multi-Family, what are my best options?
- Investor
- Cleveland
- Posts 58
- Votes 41
Hi,
I'm with a small group of investors that currently own 23 doors spread across 10 Multi-family units. We have been expanding in the areas around Cleveland in the last year and we have observed goo return on our stabilized inventory, so we are looking to keep expanding.
Our biggest pain point to keep scaling has been financing; we have deploy a variety of financing options (personal mortgage, commercial finance, cash and refinance, etc.) but the process has been generally slow. We have particularly struggled to find bridge lenders and commercial lenders for multifamily.
I thought it might be a good idea to bring this up to the forum to see if any of y'all lovely people might have an idea/network that could help.
Thanks in advance :)
Post: Trying to progress in Cleveland
- Investor
- Cleveland
- Posts 58
- Votes 41
What are your specific goals?
It might be that your goals are unrealistic; when I started we did a lot of research into how much houses where selling at, what their rents would be and how that penciled out for cash on cash / cap rate / irr. Once we understood that we knew what was realistic and started buying. Once we owned some properties we could see how are assumptions panned out and repeat the cycle.
There is opportunity, you just need to understand the constraints.
Post: Can I charge a tenant 6months upfront?
- Investor
- Cleveland
- Posts 58
- Votes 41
In California you would get into legal trouble as there are some rights into what can be interpreted as rent.
I would check with a lawyer before engaging in this behavior.
Based on your previous post it seemed as if you couldn't even afford an charge from a few hundred bucks your managing company, and now you are willing to potentially lose more money on a risky endeavor