All Forum Posts by: Matthew Shay

@Matt H. Can you comment on who was your lender for non recourse and what was the outstanding mortgage balance? What were the terms? Were there any prepayment penalties? 

@Jonathan Twombly Can you comment on how you used CMBS to secure debt for your multifamily deals?

@Kevin H. What did you decide to do in the end with financing?

Curious if anyone here has experience obtaining non recourse financing in tier III markets and what was their experience?

You are right that it was showing an inverse relationship. The y-axis has two variables and that's what I missed. Thank You for seeing that @Immanuel Sibero @Kevin Lim

@Robert C.I think that an increase in NOI can be informative about a market which is something that the graph provides. It provides potential investors feedback about whether there has been an increase/decrease in rents, expenses, vacancies, ect. over time

@Chase McArthur Great convo and thanks for pointing out how in Washington D.C. between 2016-2017 the price/unit stayed the same but the cap rate decreased because there was an increase in overall NOI. Very insightful. All in all a great discussion about the relationship between cap rate and price per unit. Even though lenders will look at multifamily from a perspective of NOI with the DSCR a broker can cause a sale that will "set the market"

I am including the link here https://www.berkadia.com/wp-content/uploads/2018/12/Berkadia-2019-National-Apartment-Forecast.pdf

Can anyone comment on the relationship between cap rate and price per unit? I would think the higher the cap rate the lower the price/unit. I am looking at the 2019 forecast in the Berkadia Report and it is showing a POSITIVE relationship between those two variables. What am I missing?

btw i forgot the link https://www.berkadia.com/wp-content/uploads/2018/12/Berkadia-2019-National-Apartment-Forecast.pdf

Thanks for your response! I am going to dm you in order to get more acquainted@Chase McArthur

Thank You for noticing. The significance of the historical trend would actually apply to myself since I am looking for stable cash flow and currently not too focussed on the appreciation. Like you said someone who is appreciation driven is going to buy low at a higher cap rate and time the market to sell high at a lower cap. You made me open my eyes now how significant it is to pay attention to the historical cap rate @Immanuel Sibero 

  I realize that the cap rate is subject to external factors such as the economy and interest rates but I am interested to hear anyone's experience good or bad who bought primarily for cash flow at a lower cap rate but historically it is at a igher rate. Do you shy away from those deals or would you take them on and hold them for a period until the cash flow surpasses the difference between the current cap rate and the historical cap rate? What did/would you do to hedge the risk? Would you structure the deal any differently with investors?

I was reading a post on BP about market trends which includes a financial forecast from Berkadia and I included the link below. My question is about Effective Rent. Are they calculating it before or after debt service? Is that considered the net cash flow per unit?

This is a silly question possibly. I have heard people in forums says regarding cap rates to pay attention to the overall trend. Just because you bought at a 7 cap today you need to follow the historical trends of the cap rate because it is likely to go back. Having said my current goal is primarily stable cash flow and less focussed on the appreciation. My question is for those who are primarily appreciation driven at what point would they be invested in a low cap rate property with a higher cap rate historically. Would you wait 5 years, 10 years to accept/be convinced about the current cap rate? Also, what other factors would you take under consideration to override the higher historical cap rate? Much appreciated!

What are some sources for spotting "anomalies" when analyzing deals? For example, if you are analyzing a list of properties on auction from a spreadsheet you may want to compare the list price of the property with the current bid or if you are using an algorithm for a market value such as a "zestimate" maybe you compare it to a number of metrics. There is also scraping... I am interested to hear what you use or have come across to spot deals or diamonds in the rough across all different asset classes whether you are analyzing spreadsheets or another platform. Currently, I am looking at multifamily deals and was wondering if anyone knows how to get a spreadsheet for these types of assets or is it only in the OM. Would be interested to also hear about tax liens. I believe that you may also spot certain deviations on spreadsheets that you can obtain from the county such as tax liens. Interested to hear if anyone does this systematically

What are some sources for spotting "anomalies" when analyzing deals? For example, if you are analyzing a list of properties on auction from a spreadsheet you may want to compare the list price of the property with the current bid or if you are using an algorithm for a market value such as a "zestimate" maybe you compare it to a number of metrics. There is also scraping... I am interested to hear what you use or have come across to spot deals or diamonds in the rough across all different asset classes whether you are analyzing spreadsheets or another platform. Currently, I am looking at multifamily deals and was wondering if anyone knows how to get a spreadsheet for these types of assets or is it only in the OM. Would be interested to also hear about tax liens. I believe that you may also spot certain deviations on spreadsheets that you can obtain from the county such as tax liens. Interested to hear if anyone does this systematically