All Forum Posts by: Chris Mason

In most cases, anyone who can get agency, gets agency. 

I put most of my multifamily deals in front of Fannie, Freddie, and 6 to 10 traditional banks and credit unions (grab bag mix of local and nationwide), as soon as I have the credit package together, if there's even a remote chance it will qualify. If one of the Agencies picks it up, great, that usually means it's a done deal. But they are picky and usually don't, so I'm not going to sit around waiting for them before putting it in front of those most likely to actually pick the deal up and execute successfully.

Even when agency does pick it up and it's 90% certain the sponsor will go that route, not a single person has ever said "man, Chris, I wish you had only given me that one option, instead of these 3 or 4 other options as well, I hate having meaningful options." I'm sure that person exists, but they wouldn't call me, they would just walk into one local bank or credit union and take what's presented to them.

The stale old listings, which is the majority, are not fake, but if it's been listed for 9 months, the listing agent already knows what they are and aren't looking for, and can probably tease it out of your email or text. Also, if it's been on loopnet for 9 months... there's a reason.

Once you make a free account on loopnet, you can filter for "date entered" and pick options from "with in the last 3 days" up to "within the last year." I exclusively use loopnet with one of the middle filters (weeks to a few months) turned on. Just to filter out the things that "the market" has already told me is crap. With the filters set to retail and 1 month and >$2m, there are 22 "real" listings in the greater greater metro area I live in. With that same time filter off (still only >$2m), there are 181 listings... So there are about 160 of them that you called "fake," that I would I call "stale and no point in looking at."

For a variety of reasons, a commercial real estate broker is often much more inclined to keep the stale listing for months and years, than a residential realtor is to keep a home listed for months and years. A one year old weathered for sale sign in front of a house is going to get locals (consumers and realtors) saying negative things about the listing agent, the same is not true for a shopping center. 

Crexi is the other major website, by the way.

I can share some other tips to filter out nonsense, and make it so you aren't filtered out as much, if you want to chat off line. 

Feel free to connect with me. Just got a client 70% LTV @ 7.25%, interest only payments & qualifying on the interest only payments. 40-unit. 

He picked that over an amortizing option with a rate in the low 6s b/c qualifying at i/o meant his loan amount could be $700k higher. 

My job is to put difficult choices like that in front of my client. 

 People that have "amazing deals" outnumber "people that actually have money to execute on them" by a ratio of 10:1 or 15:1. Usually b/c if the deal is so amazing, the money is rarely the issue, and b/c those people that do have the money thus get to cherry pick for the 1 in 10 or 1 in 15 that is the MOST amazing of "amazing deals." 

I obviously can't comment on yours specifically.

Go to the local REIA events, get in specifically with the folks doing the syndication thing.

 Question 1) 

You can absolutely get long term financing on good mobile home parks. My client had some things come up that prevented her from executing, but these were some of the options I had put together for her, a regional bank, a regional CU, and a national bank.

Reminder that NOI sizes CRE debt, and that's often what determines the down payment requirement, not anything to do with the client or particular lender, just the property itself.

If you have the ability to market and raise money, then you secure the down payment, and do the normal commercial mortgage process. LLCs are normal for CRE, so you divvy up the ownership interest how you and your capital partner(s) see fit.

What's your specific question? 

You might already be doing this, but you will want to reach out to dentists directly, particularly influential ones that know lots of other dentists. Like, oh I don't know, this list right here. :)

"Inflation expectations" is a purely rational and logical way to look at it, but let's consider that bond market buyers/sellers aren't 100% comprised of Vulcans, and that there are highly emotional and irrational individuals among them, as well. We actually CAN'T explain what we are seeing if we are operating on the "purely rational actor" hypothesis (as you implicitly observe), we MUST include highly irrational and emotional individuals to explain what we are seeing.

- Investor uncertainty. If I, as a bond investor, am uncertain about what the future will bring, I might just sit on the sidelines and not invest. In order to entice me to invest in spite of my hesitation, a better ROI must be offered to me. There's nothing that prompts inaction like uncertainty (in fact, hinting at demanding a stable 11 cap, one might argue, is a form of effective inaction, since we know how hard that is to find).

- Substitute goods. If I'm mentally and emotionally all-in on the incoming administration and think the economy is going to be amazing, best economy with the biggest hands ever, etc etc, then I can do better than gov't bonds, given the emotions I am experiencing. Maybe I'm no longer a low risk bond investor, maybe I'm parking my money in $VOO instead, CRE REITs, or perhaps higher risk higher return bonds.

Again, OP, if we're operating on the assumption that everything is about rationality and logic, then there is no explanation for what we are observing. The only way to explain it is to throw in emotion and irrationality. NOW it makes sense. 

You wrote commercial, but then talked about offices specifically. 

If you want some very broad strokes that are asset class specific, but not location specific.

Highest risk and return to lowest risk and return, offices is at the top. Extensively commented on, no need for me to add to it.

Warehouses is somewhere towards the bottom. If millenial homeowners can't even change their home's air filters, or snake a toilet, or change the oil in their car, that's guaranteed future business for HVAC companies, plumbers, mechanics, and those places all need a place to conduct business in.

The commercial mortgage pricing software I use has somewhere around 50 different asset classes in it. To say "CRE is X," but then only discuss offices, is overlooking a lot of stuff. Heck, even within offices, the small 1-tenant office buildings suitable for a dental practice or law practice, those are in a very different world. Apartment buildings, assisted living facilities, self storage, restaurants...

To be fair I'm not super up to date on the "uber of offices" concept that you are hinting at, except inasmuch as to say "um, didn't that idea kind of die off with COVID?"

My understanding is that the ballpark standard of "unless it would be outrageously tough" (something along those lines) is what applies if you're doing a rehab, seeking new permits, doing structural changes anyways, and things of that nature.

For existing pre-ADA structures, my understanding is that the standard is more along the lines of "if it can be easily/cheaply done, you have to do it." So the places we all encounter that don't even have a wheelchair ramp at the entrance (at the appropriate incline, etc), even though it would be relatively easy to put in, aren't compliant (envision a storefront set back 10 feet from the sidewalk). But the places we all encounter that could only have a wheelchair ramp put in that intrudes into the public sidewalk (which neither the landlord nor the tenant owns, and now the sidewalk may not be sufficiently wide or accessible for a wheelchair), or that would require tearing down the storefront's façade (envision a storefront right up against the sidewalk), are grandfathered in. 

Not an ADA expert, certainly not a lawyer.