investor loans

Podcast: Download (Duration: 6:35 — 6.9MB)

In this episode, we discuss financing build-to-rent properties with bank and PACE Equity financing. This is a great way to get higher leverage and better ROI for developers.

Check out this episode today.

Podcast: Download (Duration: 5:04 — 5.3MB)

In this episode we talk about financing ADU (accessory dwelling units) in California. This is a hot emerging trend happening throughout California.

While California already made huge strides in 2017 with favorable Accessory Dwelling Unit (ADU) legislation, a new series of state bills, further lower barriers to creating ADUs, aka Granny Flats.

Summary of New ADU Rules in California:

Faster ADU plan review times.
Prohibits local agencies from imposing strict requirements that exceed state mandates.
More flexible ADU size and set back requirements.
Allows both regular size and “Junior” ADUs on the same property.
Allows ADUs for multi-family units and duplexes.
Prohibits local agencies charging “Impact Fees” for ADUs under 750 sq. ft.
With all of these favorable changes you can expect to see a continued boom in the California market and beyond.

To learn about financing options please schedule a call https://calendly.com/beaueckstein/15-minute-meeting-beau

Podcast: Download (Duration: 36:32 — 34.5MB)

How the SBA 504 Loan Program Works

SBAEXCHANGE.COM will coordinate and structure the financing package between the parties. The 504 loan consists of a conventional first mortgage, typically for 50 percent of the project cost, from a third-party lender. The SBA -backed portion of the 504 loan will be a second mortgage, financing up to 40 percent of eligible project costs. The remaining 10 percent will be your small business owner contribution. Under certain circumstances, you may be required to contribute up to 20 percent of the total project cost.*

Expand Your Possibilities The U.S. Small Business Administration 504 Certified Development Company Loan program conserves your working capital by requiring only a 10 percent borrower contribution.* If you do not qualify for conventional financing, the SBA-backed 504 loan may be right for you. Certified Development Companies (CDCs) are nonprofit corporations that promote economic development within their communities through 504 loans. The SBA authorizes CDCs to provide financing to small businesses with the help of third-party lenders (typically banks). Maximum SBA loan amount: Loans are generally capped at $5 million. Certain eligible energy-efficient or manufacturing projects may qualify for more than one 504 loan up to $5.5 million each. Interest rate: Below-market interest rates are fixed for the life of the loan. Required equity: A low down payment (10 percent in most cases) conserves your working capital. Terms: 10, 20 or 25 year terms Use of proceeds: Long-term, fixed assets for expansion or modernization (usually real estate or large equipment). Refinancing of large equipment and/or owner-occupied commercial real estate.

*Startup and special-purpose properties may require an additional contribution from the borrowers

Podcast: Download (Duration: 6:04 — 6.7MB)

Freddie Mac offers Small Balance Loans that are designed specifically for smaller multifamily properties. They set the interest rates, which are highly competitive. As with most other real estate assets, the debt is secured by the property. Therefore, no personal guarantees are required. You can typically borrow up to 80 percent of the property’s value. If you choose, you can make interest-only payments for part or all of the loan term.

Sample Freddie Mac Terms for Apartment Loans:

· Size: From $1,000,000 and up
· Terms: Floating and fixed-rate options with 3, 5, 7, 10 + year terms
· Amortization: Up to 30 years
· Maximum LTV: 80% (subject to sub-market and debt service constraints)
· Minimum DSCR: From 1.25 for market-rate properties
· Recourse: Non-recourse with standard “bad boy” carve-outs
· Rate Locks: Early rate-lock options available for varying durations, typically ranging from 60 to 120 days until Freddie Mac’s purchase; Index Lock and Fast Track Early Rate-Lock options also available.
· Prepayment: Yield maintenance until securitized followed by 2-year lockout; defeasance thereafter. No prepayment premium for the final 90 days.



Advantages:

· Highly competitive pricing.
· Early rate lock.
· Up to 80% LTV.
· Partial-term and full-term interest-only available.
· Supplemental loans are available.
· Non-recourse.

Podcast: Download (Duration: 7:23 — 7.3MB)

In this episode Beau reflects on helping newbie investors along with experienced developers.

He also talks about upcoming episodes and would like to interview some up and coming investors and investor friendly real estate agents.