This newsletter issue is sponsored by Shine Insurance Agency!

Shine is an independent insurance agency dedicated to offering you smart coverage options for the best price. NLFM has used Shine Insurance for our multifamily properties and we highly recommend their services!

There are many different ways you can choose to finance your next commercial real estate project.

Let’s compare the pros and cons for a few common multifamily financing options.

Government-Sponsored Entities

Government-Sponsored Entities (GSE) are entities controlled by the U.S. Federal Government with the purpose to help stimulate residential housing and creating affordable housing in America. The two most important GSE organizations to know are Fannie Mae and Freddie Mac.

Pros

• Nonrecourse

• Quick funding

• Assumable

• Up to 80% LTV allowed

• Competitive loan terms

Cons

• Yield Maintenance

• Strict underwriting standards

• Capex is not financed

Bridge Loans

Bridge lenders issue short term capital for sponsors to improve, renovate, or reposition properties so that they can qualify for permanent financing options.

Pros

• Capex financed in loan

• Higher leverage

• Fixed & floating interest rates

• Interest only

• Flexible terms

Cons

• Short term

• Higher interest

• Higher fees

Banks & Credit Unions

PNC, Wells Fargo, small local banks, and credit unions will fall into this category. Banks have large, low-cost pools of capital from their deposit base, and can lend on a wide array of projects.

Pros

• Fixed & floating interest rates

• Negotiable terms

• Relationship driven

Cons

• Typically recourse

• Strict underwriting standards

• Usually only lend in markets they are comfortable with

📈 Do you need help finding the best possible financing terms for your next multifamily project?

We highly recommend that you contact Larry Wilemon, Senior Director at Walker & Dunlop, for your next acquisition. [email protected]

• February 2024 Rental Report

• Wave of Property-Loan Maturities Amplified by Extensions

• South Florida Rents Rise Dramatically Since COVID

• Multi-perspective View on Cap Rates

• Annualized Permits and Starts Increase in February

• Multifamily Permitting Falls 9% in January

• How new apartments create opportunities for all

• Apartment List Renter Migration Report: 2024

📈 Chart of The Week

West Region Records Nation’s Slowest Apartment Rent Growth Since Pandemic

Over the last four years, rents in the West have climbed from an average rate of $1,831 in February 2020 to $2,204 in February 2024 – an increase of about 20%

📈 Modeling Your Success,

• Shop Underwriting Models

• 1-on-1 Underwriting Session

• Join Underwriting Mastermind

• Outsource Your Underwriting

📈 Are you looking to outsource your multifamily underwriting to an experienced analyst?

I currently have capacity to accept 3 more sponsors to work with.

Why outsource your underwriting?

• Save time

• Turn key solution

• Quick turnaround time

• Professional underwriting model used

• Ability to focus on growing your business

• Hire an expert analyst for a fraction of the cost

Schedule a call with me today so we can discuss your exact underwriting needs.