All Forum Posts by: William Casey III

Someone protected a foreclosure tidal wave. How is it in your market. Please tell what market you are in, and are you seeing a

lot.

I have the secret sauce to this issue: I have a better way to do they deal that will allow you to sell your houses, capture more money on the deal and then make money on the back end. Win, Win Win. They way your setting up the deal is going to hazard you to a lot of risks. Risk=Dollars lost. 

You guys got it all wrong about Troy Fullwood. 1st he is the most generous man in the note business. He and his wife Kim have helped me with mentorship and material to get my note business going.  He differs greatly from Eddie Speed in that Troy is committed to seeing his inner circle family succeed on a massive scale by showing them how to do it.  Eddies a nice guy but he will take your money and you will have knowledge but not practical application.  Eddie gives you the theory without the how to do it. Finally, He is a guy that will pick up the phone and help close deals. Lastly, the ripoff report is bogus. If you read it you will see that someone trolled them. Troy and Kim responded that they have no record of doing business with that guy that registered the ripoff report.  Troy Fullwood is a world-class businessman that has a mission to help his fellow man elevate themselves they way he did.  

What are the ways of finding distressed or pre-foreclosure Multifamily Properties for sale.

Will

Seem to me like this would be a easy project to fund if it was shovel ready.

Best Wishes

Will

Nick,

Have you been to Dallas. Catch a flight. Go and see that is not even on the scale of apartments. It is a low class E complex. You will need to be an experience operator that specializes in this kind of housing.  Dallas has a freeze on section 8 housing so there is no help there.. High crime, high turnover, be careful you could default. There are thousands of places like that on the rough southside. That is why it is so cheap. 

Will

OPTIMISM FOR MULTI-FAMILY LENDING IS IN THE AIR

This year likely will be a defining period in multi-family lending, building upon the past several years of growth to reveal opportunities for industry innovation and breakthrough partnerships.

And yet, there is no lack of challenges to overcome in order to continue generating positive multi-family lending volume. Commercial lenders are facing the threat of new volume restrictions for Fannie Mae and Freddie Mac government-sponsored enterprises (GSEs) now under conservatorship, with their fate potentially hanging in balance. In addition, there’s the ominous if and when “taper” question, and a spate of residual mortgage-security settlements from the crash in 2008. In the meantime, homeownership levels remain stagnant and the demand for apartment rentals is gaining steam once again.

It will be interesting to note how the multi-family sector plans to catalyze the following conditions for future growth.

GROWTH OPPORTUNITIES

One particularly interesting reentrant to the multi-family ending landscape is commercial mortgage-backed securities (CMBS). The CMBS issuance volume for conduit lenders topped $85 billion this past year, a 77.9 percent increase compared to 2012. This renaissance proves that investor demand for mortgage securities remains high, reflecting renewed confidence that stricter underwriting standards will make conduit lending an even stronger channel than in the past.

Although the GSEs remain significant players in multi-family lending, regulators will continue to debate what their role should be in mortgage finance going forward. In the meantime, lenders must anticipate potential change, and are exploring alternatives to continue providing palatable financing solutions for borrowers. One of these is the development of proprietary loan products that leverage funds from institutional investors such as pension funds. And although the Fannie Mae Delegated Underwriting and Servicing (DUS) franchise has kept private capital in the lending market, new players are entering the space to share both the risks and rewards of the US mortgage market.

Another growth strategy taken on by some multi-family lenders, though not necessarily new, is regional targeting. This year, several “undiscovered” regions may prove to be ripe for lending activity as multi-family demand increases overall. According to Reis Inc., the national vacancy rate fell to 4.2 percent in this past third quarter. This rate is the lowest since 2001, with New Haven, Connecticut and Syracuse, NY posting rates of 2 percent and 2.1 percent, respectively, in the past third quarter. At that time, 11 markets had vacancy rates lower than 3 percent with the East Coast and California revealing greatest demand for new supply. Some lenders might find that setting up shop to focus on a particular secondary or tertiary market with underlying potential, lenders can root out borrower demand for a particular city, and become local market experts.

SPECIALTY SECTORS

Although multi-family activity should continue to be stable this year, another related segment that is showing strong signs of demand this year is health care lending- specifically assisted living and skilled nursing facilities. According to the skilled Mortgage Brokers Association, there was 124 percent increase in loan volume for health care properties in this past third quarter compared to the same period in 2012.

Similar to multi-family, a shift also is occurring as a result of increased demand for senior housing, where acquisitions and new construction are gaining steam. For example, the National investment Center for the Seniors Housing & Care Industry reported that the number of assisted living units under construction increased 39 percent year over year this past third quarter.

Another area showing surging demand for financing is affordable housing. This niche requires lenders not only be knowledgeable about Low-Income Housing Tax Credits, but also be able to explore innovative deals that can satisfy both the acquirers’ need for returns and the immense community demand for housing at below-market rates. An example of a creative way to take advantage of this niche is to secure a loan for a tenant-in place rehabilitation using short-term tax-exempt bonds.

APPLY CREATIVITY

The one constant in the real estate sector is that nothing is constant. Multi-family lenders must remain incredibly nimble to navigate the continually changing landscape. Adept lending providers will anticipate how wavering interest rates potential uncertainties in GSE participation and regulatory changes can create opportunities in this professional and economic climate are a private lender that partners with a bank to create a financing structure on which they otherwise may compete, or one that sources new avenues of capital, such as pension funds, to create loan products that serve customers who are at loss for options.

The allure of a reformed CMBS market, rising demand for specialty housing and new regional growth in surprising places should all contribute to an exciting and active year for commercial real estate finance professionals.

In my practice we have had a couple recent deals that involved Option Contracts so I wanted to share some different ways to work with a potential client that is involved in a Lease with Option to Purchase Contract. Most borrowers, when exercising a lease-option on a commercial property will use an SBA loan. There are times, however, when an SBA Loan won’t work and a private money commercial loan is necessary.

A lease-option-to buy is an agreement between a landlord and his tenant, whereby the tenant agrees to lease the real estate, but only if the tenant is also granted the right to buy the property for a certain price during the term of the lease. In the typical lease-option agreement, the tenant pays a monthly rent that is more than the fair market rent of the property, with the excess amount being credited towards the buyers eventual down payment. If the tenant decides not to exercise his option to buy, the landlord keeps the excess rent as his option fee.

When a commercial tenant chooses to exercise his option to buy, he will need a commercial loan. Because the SBA Lender’s approval is subject to different factors, i.e. a lender might be pessimistic about the borrower's industry or may have recently suffered losses in the borrower's geographic area, it might very well happen that although the borrower is fully qualified, he might still be rejected by the SBA lender.

The following situations necessitate the use of a private money lender instead of a SBA lender:

• The buyer’s credit is spotty.
• The buyer’s company took a hit during the Great Recession.
• The seller has offered to carry back a second mortgage. SBA lenders won’t allow a second mortgage.
• Maybe the buyer’s down payment is a little light.
• For example, the tenant pours $125,000 into upgrading the property, but when it comes time to buy the property, he lacks the 10% down payment in cash needed to satisfy the SBA. The smart private money lender will still make this deal. The purpose of a down payment is to make sure that the buyer has some skin in the game. In this situation, the buyer has clearly made a serious economic commitment to the property
• Commercial real estate fell by 45% during the Great Recession. Suppose the tenant executed his lease-option during the lowest point of the Great Recession. Since then commercial real estate has recovered significantly. An SBA lender is not going to give the tenant any credit whatsoever for that appreciation, while some a private money lenders will strongly consider it.

Hopefully this will help some-folks 

Best Wishes

Will Casey

Darryl,

My thoughts and prayers are with you about you wife's mother.

The topic of loans

Just look on Bigger Pockets to find the right lender: 

What you need: 

You have to have some kind of income to support the loan, and you have to have a down payment. Just cause homes are cheap in the big Red Machine town.  Does not make them a good investment.You have to know what is driving the local economy. Heck, Homes in Detroit are free. But does that make the a good investment for you? You also have to have a business plan about how are you going to make money with that property.   So the 3 most important points are Income and down payments or un-encumbered assets to pledge toward the loan instead of cash and a business plan.  Best wishes.

Will

1Crew Funding, Texas