All Forum Posts by: Cain McNeil

@Jay Hinrichs- I feel this is a good deal as most assets like this one that I have analyzed over the past 18 months are trading at 7 and 8 caps in my region. This one is close to a 13 cap and has been maintained well. 

Using a traditional bank can be an option however with the shorter amortization and shorter balloon payment period it takes the deal from great to good in my opinion. 

I feel there is a market correction on the horizon. With a 5 year balloon with a local bank even if we have a great deal that cash flows well they may decide not to renew the loan simply because the market has contracted. If we can lock in non recourse debt with a fixed 10 year term I would sleep much better at night- I hope this makes sense. 

Our local go to lender would give us the loan- however when we know there are better options to help our operational cash flow we would prefer not to settle. 

 I plan on closing on the deal whether it be with a local bank or a larger non recourse lender I am just hoping to find the better debt option. 

Harrison- while this is an option they cannot offer the terms non recourse lenders can. It makes the deal much more risky simply put. 

Going to try to keep this as brief as possible- I located a great deal: 25 units, NOI is 165K, contract price is $1,250,000. Property is in a B-, C neighborhood and is well maintained and managed with 100% occupancy. Owner has owned these for a long time and is looking to retire- this deal was found "off market".

We first reached out to originators for Freddie and Fannie and were told that the deal looked great and we should be able to get the following terms:

-Non recourse loan, 80% ltv

-30 year amortization

-10 year fixed rate

-4.25-4.5% interest rate

-Interest only payments for the first two years

Freddie has since come back and passed on the deal due to our market being too small and the age of the property (1984). We are still waiting to hear back from Fannie but it sounds as if they will only offer 70-75% ltv after analyzing our market. No official word yet. 

I have reached out to life insurance companies but they do not touch deals this small (at least the ones I spoke with do not) they like to be at $5-10,000,000 minimum. 

Local banks have financed deals for us before but will only do 20-25 year am, and the debt is not non-recourse. 

Any suggestions out there?? I have what seems to be a great deal and do not want to lose it!

Thanks everybody!

Nice work! I have met @Ramsey Blankenship this property, he knows what he is doing!!

@Account Closed we are buying properties in Panama City FL. Feel free to message me, thanks!

-Cain

Justin I have sold many condos here in Panama City to investors and home buyers. If you need any help or local info feel free to message me. Good luck!

Marquis please add me as well, I have seen your marketing materials around town. 

Hey Maggie, I have a friend who owns a vacation rental company. They seemingly have better prices than most (21%). Feel free to PM for more details. 

@Sherry Drennan- If you are still looking for financing or have any questions about our area I have plenty of local lenders that can help. 

@Ramsey Blankenship Thank you sir! You definitely know your stuff as well!