Multifamily Construction Loan
If you’re like most developers, you might not have all the capital necessary to fund your multifamily construction project. That’s where multifamily construction loans come
If you’re like most developers, you might not have all the capital necessary to fund your multifamily construction project. That’s where multifamily construction loans come
Construction loans, also known as “self-build loans,” are short-term loans used to finance the construction of your home or another real estate project. In this
What is a real estate acquisition loan? Acquisition loans are used to purchase real estate properties or a business entity that owns a portfolio of
What is a ground-up construction project? Ground-up construction projects are when a real estate developers or investor develops a brand new property on undeveloped land.
What is a rehab loan? Lenders provide investors with short term financing to rehab / renovate investment properties. This financing helps the investor quickly renovate
What is an owner builder construction loan? An owner builder construction loan is designed for borrowers who want to acquire residential real estate as well
What is a Federal Housing Administration (FHA) loan? An FHA loan is a type of mortgage that is designed to help low to moderate income
Bridge loans are also referred to as bridge financing, interim financing, swing loans, or gap financing. They’re a short-term financing tool that lets you borrow
Multifamily bridge loans are a financial tool used by commercial property owners to bridge the gap between the time they purchase a property and the
What are HUD loans? Housing and Urban Development (HUD) loans are mortgage loans that are offered by private leaders who are approved by the Department
What is a general security agreement (GSA)? A general security agreement is used to provide a safeguard for your assets. Dependent on the situation, lenders
What are Apartment Loans? Apartment loans are a type of multifamily loan created for the purpose of financing apartment buildings. They’re taken out by individual
Commercial mortgage-backed securities (CMBS) are fixed-income securities backed by mortgages on commercial properties, including office buildings, hotels, malls, apartment buildings, and more. They provide liquidity
What is an ADU? An accessory dwelling unit (ADU) is a separate living space attached to a single-family home. An ADU can be a secondary
What are modular buildings? Modular building is the combination of individual modules which are constructed in a controlled, off-site manufacturing complex and are combined into
What are mobile park loans? The financing of mobile home parks using a commercial mortgage that is made up of numerous mobile home lots and
What is the net rental yield? The net rental yield is a metric in the form of a percentage that shows how much cash your
What is the gross rental yield? The gross rental yield is a metric in the form of a percentage that shows how much cash your
What is the CAP rate? The capitalization rate is a metric in the form of a percentage used to reveal the rate of return of
What is a mortgage? A mortgage is a binding contract between a lender and a borrower that allows the lender to seize a property if
What is the due diligence period? The due diligence period allows investors and homebuyers to investigate and research the subject property before purchasing it to
What is underwriting in real estate? Underwriting is what lenders use the process of evaluating the financial and credit worthiness of a borrower relative to
What is a tax lien? A tax lien is created by the government when a homeowner fails to pay property taxes. Why should real estate
What is property management? Property management is the management of real estate through a third party. The property management team ensures that cash flow producing
What is wholesaling real estate? Wholesaling real estate is when an individual finds real estate investment opportunities, puts them under contract and assigns the contracts
What is a housing shortage? A housing shortage is when the demand for properties doesn’t match the supply. The United States is currently facing a
How do you refinance your property? Before beginning the process, you want to ensure that the market is offering better interest rates than the interest
What does it mean to refinance a real estate loan? Refinancing a real estate loan means you are replacing the current loan with a new
What is yield maintenance? Yield maintenance is used by lenders as a prepayment penalty. This guarantees the lender all the scheduled interest payments. Lenders issue
What is a single purpose entity? A single purpose entity (SPE) is a borrowing entity which has no other assets or liabilities aside from those
Business Entity Options Real estate investors can benefit tremendously from the formation of a business entity such as an s-corporation, limited liability company, and special
Individual Smaller investors Each property has their own mortgage Smaller portfolios Business Entity More experienced investors Numerous properties under one mortgage Larger portfolios Why should
What is a Delaware Limited Liability Company (LLC)? A Delaware limited liability company is a business entity designed under the Delaware LLC Act. Benefits of
What is LTV? The Loan-to-Value (LTV) ratio is a metric that helps lenders understand the amount of risk they will be taking on when lending
What is the CLTV ratio? The Combined-Loan-to-Value (CLTV) ratio is a metric that helps lenders understand the total amount of risk they will be taking
What is After-Repair-Value (ARV)? ARV is the estimated value of a property after being renovated and stabilized. This estimated value is higher than the purchase
What is Loan-to-Cost The Loan-to-Cost (LTC) ratio is a metric that helps lenders understand the amount of risk they will be taking on when lending
What is Net Operating Income (NOI)? The net operating income (NOI) is what drives the value of a real estate investment property or portfolio as
Environmental Site Assessment (ESA) An environmental site assessment is the comprehensive review of an asset’s environmental liability and a report that lenders require during the
What is a single-family residential property? Single family residential properties are often referred to as an SFR property. Often the homes we live in. Why
What does it mean to fix and flip real estate? The fix and flip strategy has grown exponentially since the 2008 global financial crisis. Investors
What are off market properties? Off market properties are properties that aren’t currently up for sale by the owner, listed on any listing services such
What is a BRRRR? BRRRR is the acronym for a real estate investment strategy. The strategy must be performed in the acronym’s order: Buy Rehab
How to finance land? Investors are able to finance land through a few different types of loan structures. However, the loan that you go with
Investors should know: In order to value land, investor should know that appraisers will never know the true value of the property. Why? Land can’t
What are the types of raw land investments? Investors can buy raw land that will be used in the future for residential development, commercial development,
What is a special purpose property? A special purpose property is a property that has limited options for use. A special use property may be
What are multi-unit (2-4 unit) investment properties? Multi-unit investment properties are residential assets with two to four units in a single property. For example, duplexes
What is a non-owner-occupied investment property? Non-owner-occupied means the owner of the investment property doesn’t live in one of the units nor uses it as
