All Forum Posts by: Astrit Bauta

Have you tried NYCB? There's actually a number of banks that will provide a refi loan. Are the apartments and restaurant leased?

I actually just quoted a client on a warehouse/flex development in the area with a local bank. The project was 18,000 sf but the bank will consider smaller developments. They prefer existing industrial properties but will finance new developments as well. Is this your first project?

Are the properties you are purchasing stabilized assets? What's the expected loan size for each deal? If the loan size is between $3-6 million, there's a particular agency program for small balance lending which offers pretty good terms on rate, prepayment, loan term, etc. The only thing is this program is specifically for stabilized multi-family. 

Most definitely, if the property is stabilized. Stabilized properties, meaning those that are leased to 3rd party tenants and provide cash-flow, lenders provide financing based on the cash flow at the property not the strength of the borrower. These also happen to be non-recourse loans, meaning no personal guarantee. If you are doing a ground up development or major value-add deal, that's when the strength of the borrower will be questioned as those are riskier transactions for lenders based on the nature of the project.

Happy to go into more detail or discuss further if you have any questions.

Is the property cash flowing? There's plenty of options out there for long-term fixed rate AND non-recourse options. Happy to present you with a number of options if you'd like?

50% LTV seems low. You could probably get at least 65-70% around the same rate especially given the long term tenancy. The going in cap rate is totally fine. Generally a 1.25 debt coverage is fine. Are the options you have full recourse or non-recourse?

As a syndicator.

I've read a lot about investors pooling money to create a small fund where one is the GP and the investors are the LP. Generally, the GP only invests 1-10% of the acquisition or development costs and structures the deal where the LP's get a fixed IRR. The GP for finding the land/ deal would receive a promote as well as an IRR. I am wondering how this is structured, is there a profit share, what happens during a sale (is everyone prorated their portion invested) and why would an LP agree to pool resources into a deal where there is a ton of upside for the GP with little capital invested?

We also do not charge loan fees until the deal has closed and the borrower receives proceeds from the Lender. I would be cautious of any broker that charges a % fee in milestone prior to closing.