Gennady T. Menaker’s Post

How Much Do You Need for a Down Payment on a Commercial Property? 🏢💰 When investing in commercial real estate, one of the biggest challenges is coming up with the down payment. But how much do you actually need? It’s not a one-size-fits-all answer! Here are some key factors that impact the down payment: 🔑 Property Type: Multifamily, retail, office—all come with different risk levels and down payment requirements. 📊 Loan-to-Value (LTV) Ratio: The higher the LTV, the lower the down payment. 💼 Financial Profile: Your credit score and debt-to-income ratio play a huge role. 📍 Location: Prime areas may offer better terms, while high-risk properties often require more upfront. 💡 Financing Type: Traditional loans, SBA loans, and private lenders all have different down payment structures. READ MORE ➡ https://lnkd.in/geUVck-S www.VandeWeerdRE.com Ready to unlock the commercial property of your dreams? Let’s connect and explore your options! #CommercialRealEstate #CRE #RealEstateInvesting #DownPayment #BusinessFinancing

There will be quite a bit of loans maturing over the next 24 months. It will be interesting to see if this causes a substantial amount of properties to change hands as many owners will seek to exit rather than deal with refinancing at higher rates. Thoughts? #commercialrealestate #multifamily #apartments https://lnkd.in/eKwrbRUF

There are roughly 1M real estate partnerships with a dozen limited partners or so, & many are having cash flow problems due to the need to rollover debt with a 3 or 4% interest rate to the current market rate of 9 or 10% today. When the cash flow turns negative, the partners are called upon to make a capital infusion, or else a hard lender comes in with “preferred equity”, thereby diluting the other partners. They’re “hard” lenders because they don’t care if they must take over the property & kick the others out; and then sell the property to achieve their targeted 15 to 20% return. The General Partner gambles that interest rates will drop allowing refinancing at a lower rate before the 2x balloon payment comes due in 3yrs or so. If the FED doesn't cut rates, the preferred partners will foreclose & sell the property at a big discount putting more pressure on apartment real estate prices. Ditto for commercial real estate in trouble today which is being liquidated at 30% discounts, i.e., "hard money is hard to pay back". The bottom line: either the GP has the funds to kick in & buy some time, or the property should be liquidated before the selloff builds. The hard lesson learned here: in investing, there is the need for a healthy margin of error to protect against the downside.       

Financing Options for Multifamily Investments Securing the right financing is crucial for multifamily investments. Here are common options: Traditional Mortgages: Offered by banks and credit unions, these are suitable for smaller properties. Commercial Loans: Ideal for larger properties, with variable terms and higher loan amounts. Government-Backed Loans: FHA and Fannie Mae offer favorable terms for multifamily investments. Private Equity: Partners like Cardinal Equity can provide access to capital through syndications and joint ventures. Choosing the right financing option can enhance your investment’s profitability and reduce risk. #multifamilyinvesting #realestatefinancing #investmentstrategies #PropertyInvesting #commercialrealestate

How to excel in property financing? Let’s get into Capitalization Rates - the pivotal metric in property valuation. What makes Cap Rates a crucial metric in a lender’s property valuation process? 1️⃣ Evaluating Risk and Return: A cap rate drives the valuation of your property. Think of it as an earnings multiple applied to stocks. Except it's the inverse. A lower rate indicates reduced risk, making your deal more attractive to cautious lenders. Every asset class is different. Multifamily has the lowest cap rates while hotels are the highest. It's all about risk. 2️⃣ Assessing Market Condition: Cap rates provide a standard of comparison across markets. Low variability of cap rates across multiple transactions is an indicator of a stable market, an good sign when the lender is analyzing your deal. 3️⃣ Anticipating Economic Changes: Cap rates respond to economic and financial shifts. Changing bond rates and the risk premium applied drives Lenders decisions and they appreciate investors who understand how the market responds to these fluctuations. Reflect on these: • Is the cap rate you are applying compare with prevalent market trends and recent comparables? • Are you capable of communicating the effects of changing economic trends with your lender? Especially when the lender questions your valuation? The deep understanding of cap rates can greatly influence your success as an investor. Are you maximizing your knowledge? #multifamily #realestate Let's level up your property valuation skills! Get in touch, and let's discuss how you can exceed lender expectations and close your next deal.

🔨New Construction Step 2: Research Lenders Finding the right lender is key to a smooth home-building process. Different lenders offer various new construction loan programs with benefits like low down payments, long-term rate locks, and competitive rates. It’s essential to research your options and then get pre-qualified to understand your budget. 🏦Potential Loan Programs: Low Down Payment Loans: Some lenders offer programs with as little as 5% down. Long-Term Rate Locks: Secure your interest rate for up to 12 months to protect against market fluctuations. Interest-Only Loans: Pay only the interest during the construction phase to keep initial costs low. Pre-qualifying gives you a clear picture of your financial standing and boosts your confidence as you move forward. 📅 Stay Tuned! Check back each week for the next step in our New Construction series. #NewConstruction #RealEstateExperts #HomeBuilding

Recent analysis of a deal that depicts the state of the market and why #preferredequity is the target but not necessarily the solution. A sponsor started construction on a multifamily property in 2021. Rates were cheap still and cap rates were low. The 80% #constructionloan at $20M was easily in the money. Meanwhile #taxes & #insurance have increased by more than double. #Rents in the market have not grown as massive supply comes online. Take out interest rates jumped from 4% to 6.5%. #Caprates jumped lock in step. The property, now complete is worth $24M (not the +$30M they projected). Take out financing of the $20M senior loan would be ~$17.5M. The sponsor needs $4M to save another project. Pref Equity would be the solution if the property underwrote the way intended in 2021. However, pref equity will be needed to take out the senior loan in 2 years time. If you have equity requests, pref opportunities, or need help with development and financing, please reach out. We have recently started working with 5 new family offices looking for investments and opportunities and are aggressively expanding our reach. Jonathan Glassman #CRE #RealEstateInvestments #commercialrealestate #multifamily #investing #familyoffice

Don't miss our latest research brief quantifying upcoming the next multifamily loan maturity wave. We are seeing quite a few deal where we are underwriting the value to equal the the value of the debt. Any common or pref equity is WIPED out. With lenders and equity loosing patience, a surge of multifamily transaction is looking likely in 2025. Get the full details in our latest research brief, recently featured in articles by Bisnow , GlobeSt.com and many more. https://lnkd.in/gdRfeCiq #multifamily #research #data #investing

The custom home style might be new, but the available financing options are not. Learn about where you can turn to finance building a custom barndominium home: https://hubs.la/Q02w_VjK0

Apartment buildings, which make up about 40% of the looming maturities, are at the center of the refinancing wave. #commercialreal #commercialrealestate #realestate #realestateinvesting