All Forum Posts by: James Evertson

@Jeffrey Sealy CS has a city ordinance capping 4 non related tenants. That's why you see a lot of 4/4 condos with common area/living room. 

CS specifically has a lot of multifamily new supply coming to market. Even though A&M is increasing enrollment, I think there is a lot of competition and vacancy might be an issue or you'd have to give a big concession. Also consider that if you fail to lease the property out in summer, you may have really big issue getting it leased at all until following summer, or you might have to lease as a gameday pad which although helps with paying the debt service, probably would net a loss... Or you'd be trying to lease out in fall/winter with goal of getting the lease to roll in summer (when tenant movement happens).

Jeffrey Sealy Howdy! Good to see another Ag on here. Keep reading and learning more but be ready to pull the trigger when it’s time.

@Bryson Rogan@Matt McKinney Howdy, I am in Frisco as well. Work in Addison. Maybe we should grab coffee sometime - always good to chat with folks with similar passion in multifamily...

@Kris Williams I would suggest looking up some of the local meetups and attending as many as you can. Start networking and building relationships - people will help.

@Joshua Dees Also consider that the $10k cap on property tax deduction makes the property more expensive to hold, which I would be willing to pay less for than before cap.

@Dustin S. A Phase I (ESA) will tell you if there are any recognized environmental concerns, current or historical, and if really serious, a Phase II will be recommended. It should also identify if any issues are expected, such as asbestos, conditions for mold, aluminum wire, lead pipes, etc. Some lenders that require a Phase I and if any minor issues, an "operating and maintenance" plan be drafted and "put into place". The engineer would prepare this plan and would cost $100ish. A recognized environmental concern (REC), or a major issue, may cause issues financing or require an environmental indemnity in the loan agreement.

A phase II is much more extensive and expensive, and usually involves the type of issues that will cause a lender to decline financing a property.

Outstanding. San Antonio is a good market to transact in right now... a little overlooked compared to Dallas or Austin but strong fundamentals.

Would like to add that a few things to the great commentary here: 1. Fannie/Freddie nw/liq requirements are general rules of thumb, not absolute reqs. For example, a borrower on a Freddie deal with light liquidity may pay a few extra basis points in their loan spread to compensate the "elevated risk" to the investor that buys your loan. This doesn't mean you can be way off and get it done though. 2. More importantly, Fannie/Freddie non-recourse borrowers are generally experienced operators that aren't on their first deal. An example of a new agency borrower may be someone who has worked in multifamily in some capacity for 5-10 years and has done a few deals, maybe financed by local banks. If you're new to the business but are dead set on agency lending, find a sponsor to partner with that has what you're missing I.e. Resume/nw/liq. Equity partner.

And increased sale prices?

GSE lending might be an option but you'd probably be looking at 55-65% max ltv unless you have a very strong sponsor.