Multifamily

Multifamily Investing Lessons Learned

3 Tips for Multifamily Real Estate Investing from Recent Closed Deals

Every real estate investor knows that experience is the best teacher. That’s why so many investors network at events or in online forums—to ask questions of people who have been there and done that. This helps investors avoid mistakes and better recognize good deals.

So the Lima One Capital team wanted to share some of our recent multifamily real estate financing experience, in hopes that you’ll use the tips our investors learned to find your next multifamily real estate deal.

Lima One Capital has recently announced four multifamily financing deals. These deals included:

• A 224-Unit Stabilized Property in Houston, Texas with a 98% occupancy rate
• A 108-Unit Student Housing Complex in Tallahassee, Florida
• A two-property portfolio in Cuyahoga Falls, Ohio (Akron MSA) with a total of 76 units that needed a bridge loan to prepare for a Freddy Mac loan
• A 61-Unit Multifamily Property in Texarkana, Texas, that used a value-add loan to finance rehab costs as well as the property

Just in those brief descriptions, you can see a variety of multifamily property types, financing needs, and solutions provided. But while these deals are different, some common threads emerge that any real estate investor can use to find his or her next multifamily opportunity.

Opportunity is everywhere

You probably noticed that the list of locations on these four deals is divergent, from a major city like Houston to a mid-sized MSA like Akron (which is linked to the Cleveland CSA) to the home of Florida State University to a smaller MSA in Texarkana.

This isn’t an accident. Our investors have discovered that relative value is more often found outside of the top 50 MSAs and in Class B and Class C properties that serve as workforce housing. But many major commercial real estate brokers limit themselves to deals in the top 50 MSAs, leading to more competition in those markets and a vacuum of closing power in smaller areas.

Lima One Capital has discovered that working with experienced sponsors allows everyone to win in smaller markets, like Texarkana for example. Opportunity is everywhere, and multifamily investors who can find the right deal in a smaller market will be ahead of the curve.

Timing matters

Real estate deals come with a countdown, whether it’s from a competing offer or a required closing date. So real estate investors need the certainty that their financing partner will close quickly, and will keep their word about it.

This is an area in which all hard money lenders are not the same. You can trust that a direct lender like Lima One Capital will have funds available when needed. Other hard money lenders may not be able to guarantee that the money will be there.

The same is true with shifting underwriting requirements, hidden fees, and more. Make sure you have a lender who will close without delays or surprises, so that the clock doesn’t run out on your investment opportunity.

The right lender can rescue a deal

One of the things that Lima One Capital has found in working on multifamily deals with commercial real estate brokers is that we can close deals other lenders can’t. So when an investor encounters agency fallout, or needs quick financing for some other reason, using the right lender is paramount.

Lima One Capital has served as that kind of lender for multiple multifamily investors. Contact us to see if we can help rescue a deal for you.

Takeaway

Every real estate deal is a learning opportunity. We hope that the tips found in these four deals will help you in your multifamily investing business.