Commercial Mortgage Lending - Liberty Realty Capital Group

5 Tips to Get the Most Cash Out of Your Small Apartment Property

May 11, 2016 by Randybaconin Commercial Mortgage Lending, Real EstateLeave a Comment

If you own a small multifamily property—now, more than ever—it’s good to be you. For the better part of a decade, a robust multifamily market has delivered low vacancies and higher rents. Post-recession, 2015 has been the strongest year for the rental market so far¹.

With apartment values up more than 120 percent since the end of 2009², lenders are sharpening their pencils to meet another growing demand: owners of small apartment communities looking to capture market improvements by refinancing.

Indeed, now is a great time for a mortgage reboot, especially if your loan was originated in more difficult economic times. Multifamily market growth is ongoing and rates are still near historic lows. Without the right preparation, though, you could find yourself short-changed.

Here are five tips to help you put the most cash in your pocket:

1. Aim for Accuracy.

Keeping accurate financial statements for your property is essential. If your records are spotty, it’s difficult for lenders to accurately size a loan, which could reduce the cash you take away from the deal. To get the most bang for your buck, make sure you have at least three years of historical annual operating financial statements and monthly rent rolls. If you made any capital improvements in the past, be sure you include explanations on your statements.

View entire article here in National Real Estate Investor

To find out more about our multifamily financing options click here or visit us at Liberty Realty Capital.

Outlook for Seniors Housing Sector Remains Bullish

May 10, 2016 by Randybaconin Commercial Mortgage Lending, Real EstateLeave a Comment

A growing development pipeline is not dampening the outlook for the seniors housing sector. Exclusive research conducted jointly by NREI and the National Investment Center for Seniors Housing & Care (NIC) shows that industry participants remain optimistic about improving fundamentals and investment opportunities in the sector.

The big story of late in the seniors housing sector has been the uptick in construction. In fact, the greatest number of units came online in the second quarter of this year compared to any other quarter in the past six years. As of the second quarter, construction versus inventory over the previous 12 months grew by 4.2 percent for seniors housing and 0.7 percent for nursing care, according to NIC data.

The majority of survey respondents (69 percent) anticipate more construction starts ahead in the coming 12 months, with 55 percent who predict that construction starts will increase somewhat and 14 percent who believe that construction starts will increase significantly

Yet the majority of respondents also believe that the new supply remains in check with demand. Nearly two-thirds of respondents do not think that the construction will result in overbuilding compared to the one-third who are concerned that overbuilding will occur. The upside of the story is that demand has been matching that new supply. “So the outlook is fairly bullish in that even though there is new product coming into the market, demand will be there to fully absorb that product,” says NIC Chief Economist Beth Mace.

Also, it is important to note that the new supply is not widespread, but rather limited to certain markets. NIC tracks seniors housing market data in 99 metropolitan areas. According to NIC, there are about 35 markets that represent about 80 percent of all the construction activity in the U.S. “So, in general, construction remains relatively concentrated,” says Mace.

About 20 percent of those metropolitan areas had no seniors housing construction during second quarter. However, at the other end of the spectrum, some markets saw a spike in activity at a rate of more than 15 percent in expansion relative to existing inventory, including San Antonio, Salt Lake City, Austin, Houston and Sacramento.

Find entire report here at National Real Estate Investor.

Inside Real Estate Crowdfunding

May 9, 2016 by Randybaconin Commercial Mortgage Lending, Real EstateLeave a Comment

(Bloomberg)—Last month a Houston-area entrepreneur took to Craigslist with a surprising offer: For $50,000, the author of the listing would part with 5 percent of a real estate crowdfunding startup that he said would generate profit within three months. It doesn’t take a lawyer to suggest that Craigslist might be a bad place to source startup investments. (The author of the post wasn’t available for comment when this story went to press.) But the post illustrates what some real estate investors have noticed: These crowdfunding platforms are everywhere.

Inside the Real Estate Crowdfunding Land Rush

Investors used U.S. real estate crowdfunding platforms to pour $484 million into real estate projects last year, according to research published last month by the Cambridge Judge Business School. That’s more than three times the amount in 2014. Meanwhile, the U.S. has more than 125 real estate crowdfunding sites, according to Jason Best, a partner at Crowdfund Capital Advisors, who helped conceive the framework for crowdfunding. Less than three years after the JOBS Act made it legal to solicit investments online, real estate crowdfunding sites are all over the place.

Kind of.

The idea behind crowdfunding, whether for gadgets on Kickstarter or medical procedures on GoFundMe, is to create an online place where people who need money can meet people who have it. In the case of real estate, that often means house flippers who buy, renovate, and sell single-family homes seeking loans from accredited investors—roughly speaking, people who make enough money that they can afford to lose some of it. Some platforms also let investors buy equity stakes in real estate projects or fund loans for larger commercial projects. At least two companies, Washington-based Fundrise, and Atlanta-based GroundFloor, have created mechanisms to let anyone invest, not just rich people.

View entire article at National Real Estate Investor

To find out more about various real estate financing options contact Liberty

Changes in Mortgage Financing

May 8, 2016 by Randybaconin Commercial Mortgage Lending, Real EstateLeave a Comment

There’s no doubt that now is an interesting time in the mortgage market for multifamily assets located in secondary locations, brimming with potential, promise and uncertainty. With cap rates compressed in the majority of primary markets located in coastal cities across the U.S., many of the industry’s largest players are turning to secondary markets for opportunities to purchase properties with higher growth, and therefore yield potential. This is driving aggressive capital activity in these markets and resulting in upward pressure on multifamily rental rates.

These trends are resulting in significant growth potential across properties located in secondary markets that have been tempered by other large-scale market factors in the GSE and commercial spaces as the industry determines its “new normal” and adapts to the changes being brought about by the global economy and investment activity.

The secondary mortgage market today—promise through the shifts

While the demand for mortgages against properties in secondary locations has experienced strong growth over the past four years, key aspects of its character are experiencing historic shifts. One of the best examples of this is within the central region of the country, in cities like Oklahoma City, Okla., and secondary markets throughout Texas, where the availability of capital has been very strong because of the growth of the oil and gas industries. As those employment markets have grown weaker as a result of falling oil and gas prices worldwide, the mortgage market outlook in those areas is also waning, requiring a more conservative investment approach and allowing other previously less attractive secondary markets to take center stage.

View entire article in National Real Estate Investor

To find out more about our multifamily financing visit Liberty Realty Capital here.

Lenders Tighten CRE Borrowing Standards

May 6, 2016 by Randybaconin Commercial Mortgage Lending, Real EstateLeave a Comment

Bank and CMBS loan originators tightened their lending standards for all types of commercial real estate loans during the first quarter, a marked reversal from the previous few years.

A significant number of U.S. banks reported tightening standards for construction and land development loans and loans secured by multifamily properties, according to the latest Federal Reserve Senior Loan Officer Opinion Survey released this week. Additionally, a moderate number of U.S. banks reported tightening standards for loans secured by office, industrial, retail and hotel properties.

While lenders were tightening their underwriting standards, demands for all three types of CRE loans continued to grow.

In particular, the Fed’s survey of senior loan officers found a moderate net fraction of U.S. banks reported increasing maximum loan size but tightening of their loan-to-value ratios. Another modest net fraction reported tightening debt-service coverage ratios. Survey respondents indicated that other loan terms remained basically unchanged, on net, over the past year.

View entire article at CoStar.com

Use FHA Duplex Financing to Become a Real Estate Investor

April 12, 2016 by Randybaconin Commercial Mortgage Lending, Real EstateLeave a Comment

Real estate investors in most cases need at least 25% of the purchase price as a down payment and possibly 35%. But investors willing to occupy one unit of a duplex or similar small multifamily property can get Federal Housing Administration insured loans for as little as 3.5% down. FHA loans are also suitable for borrowers with lower credit scores, and people just getting started in real estate investing.

In November 2014, Scott Trench, a recent college graduate and operations manager for real estate investing social network BiggerPockets, bought a Denver duplex. He put 5% down, moved into one unit and rented out the other. Rental income covered $1,150 of the $1,500 mortgage. A roommate contributed $550 more.

Trench wasn’t just living rent- and mortgage-free. He was also getting started as a real estate investor. In March of this year, he moved out and rented the other side as well. “I’ve got a new set of tenants in there and collect roughly $2,500 per month, on a mortgage of $1,500 per month,” says Trench, who is now renting a place to live while contemplating his next move.

In addition to $1,000 a month income on an investment, he pegs at $20,000 including down payment, he gets tax write-offs, is paying off the mortgage and benefits from any price appreciation. “This is a stepping stone in my real estate portfolio,” Trench says. “It was my home, but it was really an investment property I worked on and lived in.”

What made Trench’s foray into real estate investing work is the Federal Housing Administration’s government-backed mortgage program. FHA will make multifamily loans to borrowers with far lower down payments than almost all other loan programs.

View entire article here on TheStreet.com

To find out more about multifamily financing visit Liberty Realty Capital Group here.