All Forum Posts by: John Casmon

Thanks @Yonah Weiss

Lots of great podcasts listed. I just pivoted Target Market Insights to focus on the marketing aspects of multifamily. 

Another one I like is the Real Estate Guys. They do a great job covering various topics. 

Yes, it's interesting because I know many operators who are preaching that you want to lock in terms in case it's difficult to refi in 2-3 years. People tend to forget that while interest rates were crazy low in 2009-2010, it was also difficult to qualify for a loan at that time. 

On the flip side, those pre-payment penalties can reach into the six-figure range so certainly something to factor in. The step-down pre-pay seems to be the most viable option if you're seeking a long-term loan with built-in flexibility. 

Lots of great events coming up. I'm speaking at Dave's Mid-Atlantic event and planning to attend the Northstar event with Todd Dexheimer and Raising Capital with Adam Adams. 

@Chris Grenzig

Think that’s a smart approach. Going for the lowest rate alone is not the best strategy if you are not factoring in the pre-payment penalties.

Yes, I should have clarified. The question should have been are you deciding to do bridge loans because of the pre-payment penalties on the long-term debt. 

Most investors I speak to focus on the interest rate and LTV (loan to value) when seeking a commercial loan. Unfortunately, many are not paying as much attention to the pre-payment penalties. In today's climate I know many value-add investors are avoiding bridge loans and seeking longer-term, fixed debt. How are you managing/negotiating the pre-payment terms in case you want to exit sooner?

If you are using bridge loans, how did the pre-payment penalties factor into your decision? 

I glossed over the part about B asset vs. C asset. Ignoring market cycles and simply using your available funds for the decision , if you have ample time and the background to handle a more management intensive Class C property then do that (assuming you are self managing). If not, it’s certainly easier to manage a B property and it may be worth waiting. I would strongly consider the lifestyle you want from RE and not solely look at the returns when weighing your options.

If you are planning for a longer hold period and investing for cash-flow, I wouldn’t wait for the market to drop. I know people who have been waiting for 3 years and guess what has happened to values since then? Don’t mistake this to assume the market won’t go down. It will. But a cash flowing asset that factors in higher vacancy rates will still perform in a down market. Just keep this in mind when evaluating deals.

Also, lending requirements tend to tighten in a downturn so it may be harder to qualify for a loan in that environment.

Absolutely, happy to share, that's what this platform is for. 

@Mitchell Pollard First off congratulations. Second, and I hate to pour cold water on this thread, but the title is misleading as you didn't raise $750k if no one has signed a check over to you. The only reason I'm bringing this up is a big mistake first-time syndicators make is going off of verbal commitments without an actual deal in hand. You need the deal PLUS verbal commitments on that deal before you have a good sense of what you've raised. And even still you need to raise above the amount committed.

But you didn't ask about that, you asked about finding deals. Find brokers in your areas that have deals the size you are seeking. Find where owners go to network, whether it's a meetup, REIA or apartment owners group. Ask Property Managers or other vendors. Roofers, plumbers, electricians (INSPECTORS!!!) may know which building owners are just trying to fix something up to be done with it.

@Joe Fairless has a free download on his website of 24 ways to find off-market deals which may be helpful.