All Forum Posts by: Eric Schleif

Corvest is a good lender for these types of portfolio deals. Their terms can vary from deal to deal depending on a multitude of factors. If you are unsure of the specifics I would suggest speaking with the loan officer directly or contact a good commercial mortgage broker to assist.

@Benjamin Schultz I have no knowledge of tax statues or procedures in Maine/New England. Obviously every municipality has their own way of doing things. But in speaking from experience and just in general, the condos have separate tax parcels assigned to each so it will be taxed differently than an apartment building. I see this all the time in NYC when you compare taxes on condos and coops to apartment rental buildings. I'd call the assessor's office of the local municipality to see if you have any options to apply for a re-assessment after the sale. I'd imagine they have a set of procedures in place. I would also run your numbers with the current taxes and consider any possible tax adjustment gravy after the fact since it's not guaranteed to be reduced. 

I also wouldn't worry about owning only 18 of 19 units. You control the condo board so the only issue you will run into is if #19 stops paying dues which wouldn't adversely affect your bottom line. A number of lenders would finance this transaction. 

Hope this helps.

What are the purchase prices of each property?

You shouldn't have an issue getting this financed. Have you tried speaking with a commercial mortgage broker? 

What is the average/typical building size of the portfolio? I'm obviously biased but you should contact a good commercial loan broker for a deal that size, especially if you are asking this question. Depending on a few factors, there are probably better options other than Freddie/Fannie and Colony. Good luck with the deal. 

If you are cash-flow conscious it's usually a solid play even with the higher rate. You'll get a 30 year amortizing loan where most local banks will be offering 20-25 year amortizing loan.

Jared Rine that's interesting. I do a good clip of SBL business and have never seen the full term I/O make sense. Usually CMBS and funds are a lot more attractive for the 10 year full term I/O.

Sorry Will I just saw your response to my post. I think those are bad terms but i usually don't get involved in office deals below $5MM-$10MM. I'm also concerned by the maturity default as I am not sure what the terms of your extension are with the current lender. It sounds like you may be a little over your head on this and I would suggest calling a commercial mortgage broker in your area that does smaller loans or even call a couple of local banks to see what they could offer. Just to give you an indication I just quoted a smaller office deal in the $4.5MM range with a 10 year term on a 30 year amortization at 4.30%, 70%LTV, and non-recourse.

Jared Rine regarding the misspeak in my post, you are saying that you are placing 10 year full term I/O deals in the Freddie Mac SBL program and/or Fannie Mae small loan program?

Freddie Mac SBL or Fannie Mae Small Balance are both excellent options. You won't get full term I/O but assuming you are in a standard market, you will be able to get 80% LTV, 3 years I/O and then a 30 year amortization on a 10 year deal. They are non-recourse loans except for the standard badboy carve outs. Any investors in the LLC with over 20% equity in the deal will have to submit to a credit underwriting and sign the bad boy carve outs with you. Let me know if you have any questions.