Qualifying for a Loan – In general, if you are going to apply for a loan for a multifamily property, there are a couple of requirements that most Lenders will look for:

1. Your net worth must be at least equal to the loan amount you are seeking.
2. You must have at least 10% of the loan amount in readily-available funds (post-closing liquidity) to cover any shortgages in cash flow or unanticipated expenses.
3. You must have prior multifamily experience.

If the above criteria cannot be met, there are things that can be done. The biggest is to partner with a Key Principal (KP). A Key Principal is usually a high net worth individual or individuals that can put up their balance sheet to help you meet the net worth and liquidity AND the experience requirements. Obviously, if you do not qualify for financing on your own, a Key Principal is essential and you must find such a person way before you need him or her. To see how a Lender will look at your net worth, download and complete our personal financial statement (PFS). We would be happy to review it with you to determine for what size loan you may qualify.

Two pirates, Morty and Sol, meet in a bar. Sol has a patch over one eye, a hook for a hand, and a wooden peg leg. “Ye gads, matey,” says Morty. “What happened to ya?” Sol says, “Me pirate ship was attacked, and a lucky shot lopped off me leg. So now I got me a wooden peg.” “And yer hand?” asks Morty. “When me ship sank, a shark bit me hand off. So now I got me a hook.” “OK, but what’s with the eye patch?”“I was standin’ on a dock, and the biggest seagull I ever saw poops right in me eye.” “But ya don’t go blind from no seagull poop.”“True,” says Sol. “But it was me first day with the hook.”

We are beginning to see some repricing of multifamily assets in the Texas markets that we follow. Over the past two weeks we’ve seen two assets selling for the loan balance which means the seller is really taking a hit to equity. The two assets were both on short-term bridge loans and just ran out of time. Maybe you would not consider these classically “distressed” deals but the sellers had other problems in their portfolio and had to move on the properties. In the Texas markets, we are seeing over $15 billion or 800 properties (of 50+ units) with loan maturities prior to the end of 2024. Of these 800, 36% were originated in the 2020/2021 time period during a period of rapid price appreciation. We expect to see more stories of Sellers leaving equity on the table to exit assets. We think that focusing on deals with near-term maturities, especially if originated at peak pricing, will be the place to find relative bargains.

Apartment construction brought 1.2 million new apartments to the market since 2020 and expectations are for another million units to be constructed by the end of 2025. New York, Dallas and Austin are the growth leaders. New construction is expected to slow down in 2025 as current interest rates and bank’s reluctance to lend will slow new construction starts. What does this mean? There will be new projects with lease-up concessions competing with existing apartment stock. An investor purchasing a new project needs to be very careful with rent increase projections. Rent growth is already slowing but a new project in your neighborhood can draw away residents and decrease rents until the new complex is absorbed in the market. The good news? Even with new project completions, the US remains with a housing deficit. Also, the rent battles in the Class A market may spill-over somewhat to the B and C markets, but the new construction will not have a major impact on workforce housing. Those investors buying B and C projects know very well that “they just aren’t making any more B and C apartments”.

What We Do

We arrange financing for Multifamily properties

• We arrange debt & equity – Conventional, Agency, Mezzanine and Preferred Equity
• If we like a deal we may co-invest
• We talk to a lot of Sponsors, Borrower, Brokers – show us your deals, we may have interested parties
• We might have a deal you would be interested in

CALL ME ABOUT PARTNERING (832) 690-7216 – jbeggins@oldcapitallending.com

Refer Customers to Us –

• If you cannot place financing for a bank customer
• If you need to arrange capital for a property you are selling
• If you work for an owner who needs financing help
• We pay generous referral fees if your organizations allows ​

Let’s Have a Conversation

Register at www.buildmultifamilywealth.com for updates, articles, education and valuable information

Brought to you by

Using Chatgpt to Write Filler Content

Oftentimes the most tedious portions of Offering Memorandums  to write involve location narrative. What are the amenities surrounding a property? If you are very familiar with a neighborhood you may be able to point out primary landmarks and neighborhood features easily. If you do not know an area, research can be time-consuming. Enter Chatgpt. Perhaps we want to describe downtown Austin’s amenities. A simple query; “Describe the most popular amenities in downtown Austin” yields the following description:

Downtown Austin, Texas, is known for its vibrant and dynamic atmosphere, offering a wide range of popular amenities that cater to residents, visitors, and tourists. Here are some of the most commonly enjoyed amenities in Downtown Austin.

1. Live Music and Entertainment Venues: Austin is often referred to as the “Live Music Capital of the World.” The downtown area boasts numerous live music venues and bars that host performances by local and internationally renowned artists. Venues like the historic Continental Club, Antone’s, and the Mohawk draw music enthusiasts looking for a lively night out.
2. Lady Bird Lake: This picturesque reservoir along the Colorado River offers opportunities for outdoor activities such as kayaking, paddleboarding, and jogging along the scenic Ann and Roy Butler Hike-and-Bike Trail. The Ann W. Richards Congress Avenue Bridge is also famous for the spectacle of bats emerging at sunset from March to November.
3. Food and Dining Scene: Downtown Austin is home to a diverse and thriving culinary scene. From food trucks and casual eateries to upscale restaurants, you can find a wide variety of cuisines, including Tex-Mex, BBQ, fusion, and international flavors. The popular South Congress (SoCo) and East Sixth Street areas are known for their dining options.
4. Cultural Attractions: Museums and cultural sites like the Blanton Museum of Art, the Mexic-Arte Museum, and the Bullock Texas State History Museum offer opportunities for learning and exploration of art, history, and culture.
5. Nightlife: The downtown area is bustling with nightlife options. Sixth Street, often simply referred to as “Dirty Sixth,” is famous for its bars, clubs, and live music venues, attracting both locals and visitors looking to have a good time.

It goes on, but the point is a designer can save enormous amouts of time using Ai to provide filler narrative content. Capabilities are not yet in place to provide the real estate analytics prepared by a real estate professional but any tools to speed up processes are welcome and allows more time for deeper analysis.

Small sample of current rates. Contact us to discuss your deal so we can tailor financing to your needs and situation. Contact us for pricing on:

• FHA – 223 (F) and 221 (D) 4
• CMBS
• Bridge Loans
• Preferred Equity
• Affordable Agency

Latest Band Happenings

My son’s band, Wild Child, just concluded a West Coast tour and are now back in Austin for more songwriting, recording and preparing for their first of the year tour of the British Isles and parts of Europe.

Check out their latest album – END OF THE WORLD –
wildchildsounds.com

Great group of professional musicians led by Alexander Beggins and Kelsey Wilson. Look them up and take a listen – support independent musicians!

Sidney’s Mom buys a new apartment She calls her son once she is moved in and is gushing about what a nice place she has and invites him to come see it. Of course he agrees so she starts giving him directions on how to get there. “Once you park, head straight through the courtyard and you’ll see a buzzer for the apartments. Use your right elbow to hit 3B and I’ll buzz you in. When you get inside walk over to the elevator and use your knee to push the UP button. Then use your left elbow to hit 3. I’m the apartment at the end of the hall. Kick the door two times and I’ll come open it for you.” The son is understandably confused by these detailed instructions. “But Mom, can’t I just use my hands for the buzzer and elevator and to knock on the door?” he asks. She pauses for a minute. Finally she says – “Oh, so you’re not bringing anything…”

Send me your customers, clients, friends and associates that are interested in growing wealth in multifamily. I arrange financing for new or experienced investors but more importantly advise clients on how to get deals done. We educate, underwrite, size up and package deals for the best chances of success. We know the markets and what is possible today. If we are successful in arranging financing for your people, we pay generous referral fees (if you are permitted to accept them). In addition to arranging capital, we also assist investors in finding great vendors to add to the investing team. We may also be able to find properties for investment if your clients are searching. Contact me – jbeggins@oldcapitallending.com (832) 690-7216, to explore solutions and opportunities for you and your clients.