Commercial loan due diligence

Winston Rowe & Associates

Commercial loan due diligence refers to the process of thoroughly assessing the risks and opportunities associated with a potential commercial loan. Lenders and financial institutions conduct due diligence to evaluate the creditworthiness of the borrower and the viability of the proposed loan. Here are some key aspects of commercial loan due diligence:

  1. Financial Analysis: Lenders analyze the financial statements and tax returns of the borrower to assess their financial stability, revenue generation, profitability, and cash flow. This helps in determining the borrower’s ability to repay the loan.
  2. Credit History: Lenders review the credit history of the borrower, including credit scores and credit reports, to evaluate their creditworthiness and track record of repaying debts. A strong credit history increases the likelihood of loan approval.
  3. Business Plan and Purpose: Lenders examine the borrower’s business plan to understand their goals, strategies, and the purpose of the loan. They assess the feasibility of the plan and how the loan will contribute to the borrower’s growth and success.
  4. Collateral Evaluation: If the loan requires collateral, the lender conducts a valuation of the assets being offered as security. This assessment helps determine the value of the collateral and the lender’s potential recovery in the event of default.
  5. Legal and Regulatory Compliance: Lenders review the legal and regulatory compliance of the borrower’s business. This includes assessing licenses, permits, contracts, leases, and any potential legal issues that may impact the borrower’s ability to repay the loan.
  6. Market Analysis: Lenders may evaluate the borrower’s industry, market conditions, and competition. This analysis helps them assess the borrower’s market position, the potential risks, and the likelihood of the borrower’s business generating sufficient revenue to repay the loan.
  7. Environmental and Insurance Considerations: In some cases, lenders may conduct environmental assessments to identify any potential environmental risks associated with the borrower’s business or the collateral offered. They also verify that the borrower has appropriate insurance coverage.
  8. Legal and Financial Documentation: Lenders carefully review all legal and financial documents associated with the loan, including loan agreements, contracts, financial statements, tax returns, and any other relevant documents. This helps ensure the accuracy and completeness of the information provided.

Commercial loan due diligence is a comprehensive process that allows lenders to make informed decisions about extending credit. It helps mitigate risks and ensures that the loan aligns with the lender’s criteria and the borrower’s ability to repay.

Got Funding? Get Creative!

Funding for multifamily properties can be one of the highest barriers to entry in the real estate business. I remember the very first time I walked into a lender’s office (summer of 07). You might think I would be nervous, but NO, not me! I waltzed right into the commercial lenders office at the bank that I had been keeping my (unimpressive) checking account at for the last few years, sat down, and began to explain my big plans for my future in real estate.   Note- Something I learned much later in life, is that if the person you are speaking to, is staring off into space or looking fixedly at the Ficus plant in the corner of their poorly decorated, mid-level managers office… they don’t give a damn what you are talking about.   The lender was actually polite enough to let me drag on about the 100-unit deal I had brought him to look at. When I was done with my Oscar-winning pitch, including full-color pictures of the property, he gently leaned forward in his seat and looked me in the eye, and said…  “Who do you think you are? What money do you think you have to put down on this multimillion-dollar deal? What experience do you have, that you think qualifies you, to buy/borrow on such a large deal? Thank you for your interest in our institution, but we are in no way interested in your loan application. Have a nice day.”  That was the end of that conversation. I walked out of that guy’s office feeling about six inches tall. True story.   I wish I could say that I shrugged it off and went right out into the real estate world and built a huge portfolio and became successful besides his admonition. Truth be told I went home super pissed off. Yes, I did eventually do all those things, but not before getting set back mentally and emotionally.    If you have been in the real estate business for a while, I bet you have a similar story of your own. It’s normal. What followed was the next 17 years in the multifamily business and the building of a large portfolio and management company. I survived the Great Recession by mastering the techniques of creative financing such as seller financing, master lease options, and raising private capital just to name a few. I have seen days like this before.   Now we are entering into a similar time in the lending/economic market (like just before 2008). Rates are high and prices are high too. That is a combination what will either result in prices coming down or downpayment going up. The third option is creative financing for multifamily. Using techniques like master lease options or seller financing.   Master Lease Option  A technique to control the operations and future sale of a property with the use of 2 contracts.  The Master Lease- this contract is a rental agreement between you and the seller of a property giving you the right to rent the entire property with the right to sublease the units to the tenants.  The Option Memorandum- this contract sets the price that you and the seller have agreed on and the time in which you have the exclusive right to buy the property at the agreed upon price.  Use this when a seller has a mortgage on the property.  Risk- you have the rights of a renter not an owner.Seller Financing  This is as simple as it sounds. The seller will be financing (holding a mortgage on) the property they are selling you. Instead of receiving all cash at closing (usually funded by the bank loan + downpayment) the seller will receive a lien against the property. Just a bank loan the seller will have to foreclose on you if you don’t make the scheduled payments.   The deed will transfer to you after a regular closing (title company/lawyer).  The seller must have full equity to transfer the title.  Loan terms (length, rate, downpayment) are all fully negotiable.  Give on price, take on terms!    I used these techniques to build by first portfolio. Creative financing for multifamily will be one of the most talked about topics in the near future. Why? Because it works when traditional debt is not an option, but the seller still must sell.   If you want more info, check me out the Education (to be hyper-linked) section of our website where I have free courses teaching you how to:  How to Get Creative Financing for Real Estate Deals  Use Master Lease Options  Get Seller Financing Get Brokers to Find You Creative Deals Negotiate Creatively Much More

Baby Boomers Stay in Their Homes Longer, Driving Younger Households Toward Single-Family Rentals

Seniors Aging in Place Limit Supply of For-Sale Housing, Leaving Fewer Options

A growing number of seniors are staying in their homes longer and limiting the supply of houses for sale, and real estate executives and analysts say that’s combining with higher mortgage rates and a tight supply to push aspiring homebuyers toward single-family rentals.

Senior couple on porch Shutterstock_566888527 Households made up of those at least 65 years old increased 51.2% between 2007 and 2021, far eclipsing the 4.4% gain among non-senior households, according to a study by economic advisory and data science firm Chandan Economics for multifamily lender Arbor Realty Trust. That has been a major force in limiting supply and increasing pent-up demand that the report concludes is “poised to continue growing.”

A big driver in that group are baby boomers, those 59 to 77 years old, who have been driving societal and cultural trends for decades. More of these seniors staying put means fewer opportunities for younger generations to buy, and those who aren’t in a position to purchase a house often end up planning to rent longer.

That’s resulting in young families increasingly choosing to rent single-family homes, some by choice but many because they can’t afford to buy, analysts said.

Jonathan O’Kane, vice president at Chandan Economics, said the build-to-rent market is also affected to some degree by seniors choosing to stay in their homes.

That effect on limiting supply is amplified by another trend: “Builders no longer are constructing the types of sub-1,400-square-foot homes that used to make up the starter home inventory,” with “fewer affordable entry points to homeownership for younger households,” O’Kane said in an email.

Higher Mortgage Payments

At the same time, mortgage rates have soared, reaching about 6.54% for a 30-year fixed mortgage, more than double the rate at the end of 2021, according to Mortgage News Daily.

Financing Your First Multifamily Investment: Tips for New Real Estate Investors

As a seasoned real estate investor, I understand the challenges that new investors face when financing their first multifamily investment. In this article, I’ll provide tips for new real estate investors on how to finance their first multifamily investment and navigate the complexities of the commercial loan market.

Know the Local Market

One of the most important things to keep in mind is that the type of commercial loan you get should be matched with the real estate cycle. Real estate is hyper-localized, meaning that what works in one market may not work in another. That’s why it’s essential to have a deep understanding of the local real estate market and its dynamics.

Here are two cautionary tales for first-time real estate investors:

Applesway Investment Group defaulted on its loans due to rising interest rates and the declining value of its multifamily properties in Houston.

Veritas Investments defaulted on a $448 million loan on 62 older apartment buildings in San Francisco, which had been securitized into two CMBS by Goldman Sachs. The loan was originated during the free-money era, and investors eagerly piled into it without considering the possibility of much higher rates.

Both examples illustrate the importance of being conscious of the loan you take out based on the current real estate cycle.

Real estate values can fluctuate rapidly in an environment of rising interest, and cap rates decompress in the oversupply or recession phase of the market cycle, putting borrowers in a precarious financial situation.

As an investor, you should talk to several agency loan brokers, lenders, and local community banks to be informed of best loan option you should use. Remember not all lenders are the same.

Not All Lenders Are Equal

Let me tell you a quick personal story that illustrates that not all lenders are equal. I once invested in a property in Indianapolis for $40k and allocated $30k for rehab work. I estimated the property’s worth would increase to $80k after the rehab. However, my rehab budget unexpectedly increased to $38k, leaving me with a total investment of $78k.

After completing the rehab work, I had the property appraised, but the first two appraisals came back lower than I expected. The first appraisal was $62k, and the second one was slightly higher at $65k. I was disappointed, but I didn’t give up.

I reached out to other local investors for advice, and they recommended that I connect with a particular local bank. I followed their advice and contacted the bank to request a third appraisal. The new lender also recommended a new appraiser.

The third appraisal came back at $85k, which was more than my initial projection of $80k. I was ecstatic! Moreover, the new lender offered me a lower interest rate than my old lender.

This experience taught me the importance of networking with multiple lenders. Different lenders may have varying perspectives on the same deal and offer better terms and rates than others. Additionally, some lenders may have better connections with local vendors, which can be beneficial in the long run.

When it comes to real estate financing, there are several options available, including agency loans, community bank loans, and bridge loans. Each type of loan serves a different purpose and choosing the right one can be critical to the success of your project. Let’s take a closer look at each type of loan and when it might be appropriate to use them.

Types of Loans

Agency Loans

Agency loans are issued by government-sponsored entities such as Fannie Mae, Freddie Mac, or the Federal Housing Administration (FHA). These loans are usually long-term, fixed-rate loans with low interest rates and favorable terms. They are typically used for the purchase or refinancing of multifamily or commercial properties. Agency loans are ideal for borrowers who have good credit, a stable income, and are looking for a long-term financing solution.

Community Bank Loans

Community bank loans are issued by local banks or credit unions. These loans are typically smaller in size and have a shorter term than agency loans. Community banks often have more flexibility in their underwriting criteria and can be more willing to work with borrowers who have less-than-perfect credit or are financing a unique property type. Community bank loans are a good option for borrowers who need a smaller loan amount and value personal relationships with their lenders.

Bridge Loans

Bridge loans are short-term loans that are often used when a real estate deal won’t qualify for traditional financing due to high vacancy rates or the property needing significant rehabilitation. These loans are secured by the borrower’s current property and can provide the necessary funds to make a down payment on a new property or cover renovation costs. Bridge loans can be an excellent solution for real estate investors who need quick financing to take advantage of time-sensitive opportunities or to overcome financing challenges. However, it is important to note that bridge loans typically have higher interest rates and fees compared to traditional financing options, so borrowers should carefully consider their ability to repay the loan before moving forward.

When choosing a real estate loan, it is essential to consider your specific needs, the property type, and the financing terms. Agency loans are ideal for long-term financing of multi-family or commercial properties, while community bank loans are best for smaller loans or unique property types. Bridge loans can provide short-term financing to take advantage of time-sensitive opportunities. Always consult with trusted team members to determine which option is best for you.

Building Relationships with Lenders

With experience, I have come to realize the importance of establishing solid relationships with established commercial lenders. One such lender that I have built a great relationship with is Old Capital. I have made it a point to attend their weekly webinars for about a year now and have had their lending broker as a guest at my meetups. This relationship has allowed me to stay up to date on rates, loan terms, and loan to value on agency debt.

Additionally, I have established a strong relationship with a mortgage broker from District Capital who is able to provide me with a second quote on rates and terms on agency loans specifically in my Midwest markets. This has proven to be invaluable as it allows me to compare loan options and select the best one for my investments.

When I visit my markets, like Kansas City, I make it a point to take my local community bank lender out for lunch so we can meet in person, and he can give me an update on the local lending market. This allows me to build a personal connection with my lenders and establish trust. More importantly, it allows me to show them that I am a real person and am serious about doing business with their bank in their market. I explain to them the projects I’m working on and my business plan. I make it a point to get their feedback, as it is essential for building a long-term relationship.

As we face uncertain economic times and a possible recession, it is more important than ever to strengthen our relationships with commercial lenders and build new ones. This can involve attending industry events, connecting with potential lenders through social media, or simply reaching out to local banks and credit unions in the markets where we are looking to invest.

As lending standards tighten, access to debt and equity will become increasingly challenging. Therefore, having a network of lenders who trust and believe in our business model is what will separate us from unsuccessful multifamily investors. By continuing to build strong relationships with our existing lenders and exploring new opportunities, we can ensure that we have the necessary resources to close deals and grow our portfolios, even during difficult times.

Key Principals Are Key

Having a key principal is critical when securing commercial lending for a multifamily deal. A key principal is an individual who has a personal guarantee on the loan and typically has a net worth equal to or greater than the loan amount. Lenders require key principals to ensure that someone is personally accountable for the loan. Additionally, key principals often have established relationships with lenders, which can be incredibly valuable when trying to secure financing. I make sure to stay in regular contact with my key principals, calling them every month to catch up and provide updates on my deals. This helps to build a relationship of trust and ensures that they are up to date on my progress as an investor. Having a strong relationship with a key principal can make all the difference in securing the necessary financing for a multifamily deal.

How to Raise Equity to Finance Deals

As a multifamily investor, I know that on top of building relationships with commercial lenders, it’s also essential to be able to raise equity to finance deals. Having access to capital is critical to success in this business. But how do you raise capital from private investors? It comes down to three phases: know you, like you, and trust you.

Phase 1: Know You

The first phase is getting potential investors to know you. It’s the most important step because people can’t like or trust you if they don’t know you. To spread brand awareness, I have been a guest on multiple podcasts, written blogs, and hosted a monthly local meetup. These activities allow me to connect with potential investors and share my story, experience, and investment philosophy.

Phase 2: Like You

The second phase is getting people to like you. To accomplish this, I post regularly on social media about my multifamily journey, sharing insights and updates on deals I’m working on. I also send potential investors monthly newsletters, updating them on the latest industry trends and my progress as an investor.

Phase 3: Trust You

The final phase is getting investors to trust you. This is achieved by building a personal connection with them. I call my investors every month to catch up on their lives, what’s going on with them, and provide updates on the deals I’m working on. These conversations help to build a relationship of trust and demonstrate my commitment to transparency and honesty in all aspects of my business.

It’s crucial to be confident that you can secure a loan and raise equity when you find a deal. Having a reliable network of investors who trust you and believe in your business model is key to being able to act quickly when opportunities arise.


In conclusion, as a multifamily investor, building relationships with commercial lenders is crucial, but it’s equally important to be able to raise equity from private investors. By following the phases of know you, like you, and trust you, we can build a network of investors who are committed to supporting our business goals. This allows us to take advantage of opportunities in the market and grow our portfolios with confidence.

What are the Pros and Cons of Owning an Apartment Complex?

How to Purchase an Apartment Complex

Investing in an apartment complex is one of the most time-tested ways to build wealth. In fact, multifamily investing has an incredible array of benefits, including cash flow, the ability to finance properties with a limited amount of money down, and incredible tax benefits (just to name a few). However, apartment investing isn’t always sunshine and daisies; investors have to put in a lot of hard work to make sure their properties turn a profit. In this article, we’ll discuss some of the major pros and cons of owning an apartment complex. That way, you can make a more informed decision as to whether acquiring a multifamily property is a good fit for your personal investment needs.

The Benefits of Apartment Complex Ownership

As we just mentioned, apartment ownership can have a wide variety of benefits. Some of the most substantial benefits include:

Cash flow: While some types of investments, such as dividend stocks and annuities, provide some degree of payments to investors, they generally don’t hold a candle to the amount of cash generated by apartment buildings.

Leverage: Apartments have the massive benefit of allowing borrowers to put down around 20% to 30% of the sale price while financing the rest over a 25-30 year amortization period. In general, stocks, bonds, mutual funds and other types of investment opportunities offer nothing of the sort. 

Tax Incentives: Multifamily real estate is an ideal investment from a tax perspective. Not only can investors take substantial mortgage interest and depreciation deductions, but they can also often deduct travel and utility costs, as well as other expenses.

Equity growth: Just like a single-family home, as time goes on, an investor will generally build up equity in their property as their mortgage is paid off. In addition, equity will increase if the property itself increases in value.

Syndication/partnership potential: While most stock or bond investors invest by themselves, apartment complexes are an ideal investment for groups. By teaming up with other investors, you can purchase larger and better properties, maximizing your potential profits.

Supplementary income: Though rental payments from tenants are typically the most substantial source of income for an apartment complex, other sources of income can make a serious difference. The most common supplemental income sources include laundry machines, vending machines, and parking spots for non-residents (which can be particularly profitable in upscale urban areas).

The Downsides of Apartment Complex Ownership 

While owning a multifamily property has tons of advantages, it has a number of potential downsides as well, including:

Time investment: Selecting, financing, and purchasing an apartment complex can take months. And, while you can hire a property management company to take care of many of the day-to-day responsibilities of apartment ownership post-purchase, you’ll still need to spend a certain amount of time supervising the management company to ensure your investment remains profitable.

Local market factors: While smart multifamily investors are careful to purchase real estate in great locations (or locations that seem to be trending towards greatness), no one can predict the future. For instance, the neighborhood you thought was gentrifying could see an increase in crime and poverty, leading to a steep decline in the value of your investment.

Vacancies and tenant issues: While tenants generally provide 95% or more of the income generated by an apartment property, they can also cause serious headaches. Even tenants with great credit and long-term leases sometimes leave unexpectedly, not to mention those who fail to pay their rent, or worse, cause significant damage to your property.

Liability: While smart property owners always have a robust insurance policy, owners still could potentially be held liable for accidents and crimes that occur on the property. This risk is basically non-existent for comparable investments such as stocks, bonds, or real estate investment trusts (REITs).

Maintenance expenses: From windows and railings to appliances and lightbulbs, apartment buildings often need constant maintenance, and landlords are responsible for paying for it. While insurance may cover larger items, maintenance, repair, and replacement costs are still a significant expense.

Low liquidity: Unlike stocks or bonds, you can’t simply click to sell an apartment building– and, even if you could, you might not get the price you want. Multifamily properties often take several months to sell, and closing can be a time-intensive process.

Apartment Investing is a Great Opportunity, But It Isn’t For Everyone

Owning an apartment property isn’t everyone’s cup of tea. The ideal apartment owner/investor has a decent level of risk-tolerance, a strong work ethic, good critical thinking skills, and a willingness to work with numbers. However, if you possess the factors mentioned above (or at least a few of them), purchasing an apartment building could be an excellent choice—and a great way to provide income for you and your family for years to come.

Pros And Cons of Section 8 For Real Estate Investors

Section 8 housing has been controversial with real estate investors since its inception in the 1930s as a response to the Great Depression. The program has evolved ever since, and today its main purpose is to provide low-income Americans with subsidized housing. There’s a lot to consider about the program in general, including the pros and cons for real estate investors.

Pro: Stable Rent Payments

This is perhaps the biggest advantage of the program. Landlords can count on getting 70%-100% of the rent from vouchers given by the government. There are, of course, glitches in the payment system at times, but while it can take time for these payments to come through, they do always come.

The real advantage here is the possibility of mitigating some of the risks in getting tenants who don’t pay reliably. The 2020 pandemic has also highlighted situations where it could be possible to have difficulty collecting rent from even the most reliable private tenants even after the most stringent background checks.

Otherwise reliable tenants are being furloughed from their jobs unexpectedly, through no fault of their own, and state governments are even issuing regulations forbidding evictions during the pandemic or putting a halt to all public hearing evictions.

Pro: Incentives

Naturally, any investor is hoping (and actively looking) for tenants who will take care of their property, but the definition of “maintain” can be open to interpretation and vary from place to place. One of the advantages of getting a Sec. 8 tenant is that their obligations are laid out specifically in the law. Since violating these regulations means a tenant risks losing eligibility for the program, there’s at least some incentive against actively damaging a unit.

Pro: Long-Term Renters

This is a general rule and not a given, but renters under this program tend to stay longer than private pay tenants, and especially if they like the management or landlord and the property itself. This can mean lower vacancy rates.

Pro: Large Pool of Renters

As of the government’s latest accounting, there are 10.4 million people and 5.4 million households participating in the program. For properties in a geographic area with a smaller pool of private paying tenants, this can be a serious advantage.

For would-be investors, it’s always wise to look for properties in locations with lots of jobs and the kind of amenities that draw a good pool of responsible private renters. For property owners who are already stuck with a property in an area where it’s difficult to rent, Section 8 may be something to consider.

Con: Dealing With Bureaucracy

Perhaps the biggest disadvantage when dealing with any government program is the vast amount of red tape involved. It can be enormously costly to qualify your property and maintain it to the standard, and all the bureaucracy is one of the biggest reasons for this. There are inspections to arrange, lots of paperwork to fill out, and some stringent owner responsibilities that have to be followed at every step.

Con: Payment Delays

While payments are reliable, there can be delays, and there’s little you can do about this. When a tenant initially moves in, the first payment from the government won’t even show up for 30-60 days. This is not in itself an insurmountable issue, of course, as the prepared investor can work around this. It is very important to be aware of this, however, and to factor it into all calculations regarding cash flow and profitability.

Con: Constant Inspections

The inspection form and checklist from the Housing Choice Voucher Program is enough to highlight this disadvantage. Even some of the best rehabbers can fail their first inspection since HUD is notoriously strict. It’s often easier to rent property to private tenants for this reason alone.

Con: Increased Wear and Tear

While the Sec. 8 rules do have specific penalties that incentivize tenants against damaging property or appliances, it’s also more common to see higher wear and tear on a property with tenants from this program.

Some tenants clearly feel less invested in a property when they pay little or even none of the rent. Naturally, there are some very careful and responsible Sec. 8 tenants just as there are unreliable private tenants: but the general trend is for greater wear and tear on properties.

Con: Difficulty Dealing With Delinquent Tenants

The positive of renting under this program is that the majority of the rent is guaranteed by the government. The downside is the difficulty of going through the convoluted and lengthy eviction process should the tenant become delinquent on whatever portion of the rent they are responsible to pay.

In these cases, it’s not unheard of for landlords to simply settle for less profit rather than try to go through the bureaucratic process of getting the tenant removed, which is followed by another lengthy navigation of red tape to get a new tenant. Private renters can also be delinquent, of course, but the process of removing a private tenant is normally going to be less costly.

Con: Little Recourse for Damage

While incentives are there to prevent major damage, that’s not the whole story. The nature of the program means that most participants will not be financially able to pay for any damage they might cause to the property. Often the only real recourse is for the landlord to charge higher rent and attempt to recoup the losses that way.

The Upshot

Overall, HUD’s housing program is a risky venture for an investor, and for most, the cons will outweigh the pros. While there are some advantages, there are even more disadvantages and risks inherent to the program. For most property investors, choosing a good location and rehabbing it well means you’re likely to make more renting to private individuals.

This doesn’t mean it’s impossible to turn a profit with the Sec. 8 program, and some landlords have done very well. What it does mean is that it’s even more important than usual to know exactly what you’re getting into, do all your due diligence (and then maybe do it again), and seek advice from experts and local landlords before entering the program.

Florida Apartment Building Lending Purchase, Refinance and Cash Out

Jacksonville, Miami, Tampa and Orlando Florida apartment loans with low fixed rates, 80% LTV, 30-yr terms, flexible terms, interest only and non-recourse options

Maximize your Jacksonville, Miami, Tampa and Orlando Florida multifamily investment with an apartment loan or multifamily loan that meets your individual needs and investment objectives.

At Winston Rowe and Associates they provide Florida apartment loans with choice helping you make better decisions. Through their proprietary multifamily lending platform, they can quickly compare their many multifamily loan programs and lending platforms providing you with a Florida apartment loan with the best rates and terms.

Loan amounts from $1MM

Highly competitive interest rates

Interest rate locked at application

Partial and full-term interest only available


Up to 80% LTV

30-year amortization

Fixed rates up to 30-years

Yield maintenance or declining prepay options

No replacement reserve requirements

This Year’s Renters Want More Space, Good Deals and the Great Outdoors

Winston Rowe and Associates

Renters are on the hunt for open-air amenities, more space, and a better deal in the city they already live in as 2021 unfolds, according to a recent RENTCafé survey on how renters’ preferences have changed as a result of the pandemic.

An improvement in lifestyle was the main driver for the more than 10,000 people who participated in the survey while searching for an apartment on The top features respondents searched for a year into the pandemic included open-air amenities (21%) and more space (20%)—data that stands in stark contrast to RENTCafe’s March 2020 survey, where top drivers were price and safety. In addition, space and open air amenities were more important to renters than WFH amenities like home offices.

The prospect of a better deal motivated 29% of respondents, while the need for a change of scenery prompted a quarter of those surveyed to move. And perhaps most interesting? Contrary to breathless pandemic-era reports of Americans ditching their cities for secondary markets, approximately 90% of renters were looking for long-term rentals with 48% looking to remain in the same city. A mere 4% of renters chose to move because they could now be more flexible by working remotely.

“This shows that improving housing conditions—not drastic change—is the goal,” RENTCafe notes in the survey findings. Of those surveyed, one-third (34%) reported they’d already moved once over the last year, with the majority doing so because of the pandemic.

“After months of staring at the same walls, it’s understandable that some people want to make a move now, if only for a change of scenery,” the survey findings note. “However, many of those who moved back in the spring of 2020 seemed to have done so out of need—not because they wanted to. More precisely, their reasons for moving during those uncertain early days of the pandemic were related to their lease being up or feeling financially insecure.”

The survey also revealed that space and open-air amenities were more important than work-from-home amenities. Only 10% said a good internet connection was crucial, and  5% said they needed a home office.

Despite this data, the multifamily industry is prepping to meet the demands of a growing body of WFH renters. Research last year from Newmark showed that multifamily owners are increasing floor plans to create more flexible spaces (think one-bedroom plus a den) and more outdoor space to accommodate workers who are staying home. The firm advises developers, however, to make more incremental changes to unit mixes and amenities since resident needs are still being hashed out as the pandemic wears on.


New York Apartment Demand Surges As The City Jumps Into Reopening Mode

Winston Rowe and Associates

A full year into the pandemic, New York City landlords are securing new leases at a rapid clip as depressed prices appear to be luring back—or holding on to—tenants willing to sign for the right deal.

New York buildings in Manhattan, Brooklyn and Queens, the number of leases signed during February beat a record set in 2012 during the comeback from the global financial crisis. The median rental price—lease value net of concessions—fell at least 11% across those boroughs last month, according to a new report by Douglas Elliman Real Estate.

The news comes as New York City slowly begins to reopen. Restaurants will soon be able to operate at 50% capacity and movie theaters are once again beginning to show films. It’s been a brutal year for the city; the seasonally adjusted unemployment rate stood at 11.4% in December, a 7.8% increase over December 2019.

Hundreds of thousands of New Yorkers fled the city at the onset of the pandemic, to ritzy enclaves upstate, quiet towns in the Northeast and other pockets of the country. The coming months will help reveal how many intend to return, and whether rental prices will subsequently increase.

In light of the revived demand, some owners are temporarily keeping units off the market in the hopes of a sustained rebound that may help them get higher rates sooner than expected. According to UrbanDigs, a real estate insights firm, in Manhattan landlords took more than 1,800 apartments off the market in February, as the Wall Street Journal reported earlier this week. For their part, renters are enjoying the reprieve from record prices, which peaked just before the pandemic.

Below is a closer look at the current New York City rental market, utilizing data from Douglas Elliman and Miller Samuel Real Estate Appraisers & Consultants.


Non-luxury units offer the best deals, with apartments of three or more bedrooms having the biggest year-over-year discounts, possibly a sign that after living through lockdowns, renters are looking to live with fewer roommates. The median rental price dropped 22.7% over the last 12 months on those units. Two-bedroom apartments are down 8.9%, while studios are down 19.3%.

New signings are up dramatically from February 2020, but the overall vacancy rate remains high, at 5%, compared to 2.01% last year.  More than 40% of new leases come with some form of landlord concessions, the authors said, often one or more months of free rent during the first year after signing.


Brooklyn saw the “highest number of new lease signings since tracking began during the financial crisis,” Miller Samuel reports, at 1,834 for February, a 133% year-over-year increase. Still, the median effective rent dropped 16.3%, more than any other year in almost a decade. Nearly 40% of new signings last month included landlord concessions.

Studios are commanding the best discounts; median rental prices fell 18.8% compared to last February, while second place goes to apartments with three or more bedrooms, at a 12.5% decline. Still, a glut of inventory remains; there are 3,438 listings in Brooklyn, up from 1,375 a year ago. That figure doesn’t even account for units that have been pulled off the market.


The story is largely the same in Queens, where February also set a nine-year record. Inventory is up 64% compared to last year, and 36% of signings include concessions.

Overall, the median rental price dropped 13% compared to last February, to $2,522, with studios taking the biggest hit at a drop of 28.7%.


Suburbs Apartment Rents Close to Their Pre-Pandemic Peak

Though the rental market in major cities has been hard hit by the Coronavirus pandemic—plagued with a mass migration by remote workers seeking larger homes, as well as relocations because of social distancing concerns—it appears that the suburbs have not just survived COVID-19’s wrath, they’re thriving in spite of it.

While rents have declined steadily in the larger, denser, principal cities at the core of each metropolitan region, rents in the outlying suburban areas have, on the whole, rebounded to pre-pandemic levels,” according to a new report from Apartment List.

From June through September, rents dropped in cities but “quickly rebounded” in the suburbs from losses that were seen from March to June across all of the property type’s markets, the report stated. In October, rents were 0.5% higher than they were at the start of the year, and came in just under their pre-pandemic peak in March.

Suburbs are outpacing cities across the country. In 27 of 30 large metropolitan areas tracked by Apartment List, “principal cities are experiencing faster rent drops or slower rent growth than their surrounding suburbs. And in 11, including major economic centers like Atlanta, Dallas, and Philadelphia, apartments in the principal city are getting cheaper while at the same time apartments in the suburbs are getting more expensive.”

The data jibes with other recent research concerning the impact of move-outs from cities, and the resulting strength of the suburbs. A recent report from Redfin showed that in the third quarter 29.2% of users looked to move to another metro area—the highest share since Redfin started tracking migration at the beginning of 2017. The uptick is partly due to the pandemic, Redfin stated, as well as the now pervasive work-from-home culture.

Short-term suburban rentals—which it defines as one-to-two-year lease terms—could be demand drivers for residents seeking work-from-home space and outdoor access. Suburban renters typically seek larger units, such as two-to-three bedroom apartments.

If this work-from-home trend is going to be a little bit longer term, people will feel more comfortable with moving out into the suburbs.

Efforts to socially distance also are fueling shifts away from major cities to the suburbs people just don’t want to be in enclosed, dense areas.

Six Trends to Watch for in Multifamily Property Management in 2021

Pandemic creates opportunities to rethink how best to serve residents.

2020 has presented the multifamily industry with unparalleled challenges due to the pandemic with the secondary and tertiary effects forcing the industry to quickly pivot to meet resident and prospect needs. However, the pandemic has also created opportunities for multifamily owners to creatively rethink resident retention strategies and communication and how to demonstrate value. While some external factors will remain uncertain as we transition into 2021, here are six trends we expect for the future of the multifamily industry:

1. Service Will Be a Secret Weapon

Next year, enhanced customer service will become the most critical component for demonstrating value and increasing resident satisfaction across multifamily communities. While efficiency and timely communication remain two essential strategies for solid customer service, expectations are on the rise as more residents work from home. Although some prospects and residents may continue to request face-to-face (albeit socially distanced) interaction, we foresee most leaning into digital communication via smartphone apps, emails, or text alerts for updates and ongoing communication with on-site teams. For multifamily operators, that means expanding your digital resources and increasing the frequency of communication in 2021.

This also means accelerating response times and prioritizing maintenance requests since many residents are still working from home and spending ample time in their living space. It’s important for on-site teams to prioritize quickly and efficiently, especially as the volume of requests increases and residents expect almost real time responses. What was once a minor maintenance issue can now quickly escalate into an unsatisfied and angry customer as residents are experiencing the maintenance issue for more hours of the day. As we continue into 2021, on-site teams will have to provide an enhanced experience by quickly managing requests, clearly communicating all updates, and going the extra mile to offer the best possible management experience.

2. Prioritize the Retention of Top Qualified Talent

Employing a highly skilled property management and maintenance staff is paramount to resident satisfaction and successful day-to-day operations. However, finding and retaining top talent will remain a challenge in 2021 for several reasons. Multifamily is a highly competitive and growing industry with a surplus of opportunity. We’re now seeing an excessive demand for experienced, trained personnel, but a labor shortage of qualified candidates entering the market. 2021 will continue to expose the need for more highly skilled and passionate staff members. The companies that succeed in attracting top talent do so by offering competitive salary packages; providing training, education, and support; and continually looking for creative ways to “surprise and delight” employees. Example perks could always include an appreciation day for the teams, flexible work hours, or an unexpected day off. Onboarding a professional, qualified, and capable team translates to resident satisfaction and long-term resident retention.

3. Looming Economic Uncertainty Clouds the Industry

Although this year brought economic uncertainty with changes in income and employment status, rent delinquency for multifamily hasn’t been as significant as anticipated. Research conducted by the National Multifamily Housing Council reflects a 1.1% increase in overall delinquency in September 2020 versus the prior year, with a 4.8% decrease in on-time payments. We’ve had a similar experience at Fogelman. Rent collections have outperformed expectations during the early part of the pandemic; however, we recognize that many are still struggling financially, which might impact future collections.

It’s difficult to predict what delinquency will look like in 2021 since it’s dependent on employment recovery and what stimulus is available to help struggling renters pay their rent. Along with the rest of the industry, we’ll be monitoring economic conditions as we head into the new year.

4. Getting Creative with Resident Connection

Striking the balance between resident interaction and safety precautions will continue to be a challenge for multifamily teams in 2021. Residents may want to resume “normal” social connection and activities with the coming winter months, but the ongoing pandemic will challenge property management teams to rethink social events and connectivity. Though we’ve seen a lot of virtual happy hours, drive-by celebrations, and Zoom classes, it’s the teams that leverage creative programming to bring people together online that will have the most success in 2021. For safe, socially distanced resident activities next year, we expect to see more virtual scavenger hunts and trivia, virtual cooking and mixology classes, and community visits from local favorite food trucks.

5. Adapting to the Evolving Needs of Residents

We understand residents are using their living spaces differently in the wake of increased remote working. Apartment units have become a place of work and leisure, and there are no signs of that changing anytime soon. Some major companies, such as Google, Target, Salesforce, and Facebook, are delaying the return to a traditional office environment until summer 2021, and a handful of companies, like Microsoft and Twitter, are transitioning to a permanent remote status.

In 2021, management companies will need to continue adjusting their offerings to meet resident needs in the short and long term. Whether that’s providing better high-speed internet packages, creating socially distant co-working spaces, offering reservation-based conference rooms, or establishing wellness-focused areas like outdoor green spaces and trails. Those that adapt the fastest and implement feedback from their residents will be most successful in strengthening resident retention and satisfaction.

6. Go Digital, Stay Connected

Because of the pandemic, we’ll continue to see less physical interaction with residents, causing a greater demand for information and the frequency at which it’s delivered across online platforms. As mentioned earlier, digital communication tools like apps, emails, and texts are the industry standard and mainstay for properties in 2021. Another must-have for convenience is a web portal that allows residents to make payments, submit maintenance requests, and view discussion boards or upcoming events. For prospects, offering self-guided and virtual property tours will be an important, safer option. Overall success in 2021 requires that digital tools provide both convenience and ease of fast, frequent communication to help us meet our residents and potential residents right where they are—online.

Tech Companies Moving to Texas Fuel State’s Apartment Boom

In the last few months, several major California technology companies have announced plans to move to Texas—an exodus that will further fuel the Lone Star state’s ongoing  apartment construction boom. There are already currently 126,900 apartments under construction in Texas, making the state the national leader for new apartment construction, according to RENTCafe.

Nor is this influx likely to through the state’s supply-demand balance out of whack. “Texas holds the indisputable advantage of land use,” says Doug Ressler, manager of business intelligence at Yardi Matrix. “What’s great about it is that it enjoys an adequate availability to support population growth and migration, from dense cores to available exurban or suburban areas.”

Dallas is leading the state in new apartment construction with 49,000 new units under construction. In the last decade, more than 177,000 new units have been built in the market. Austin comes in second with 31,000 apartment units in the current construction pipeline and 22,600 of those units are located in Austin proper.

It isn’t surprising that these two markets, which account for more than half of the total apartment construction in the state, are also the primary locations for tech companies. Oracle and Tesla are both planning to move their California headquarters to Austin. Tesla alone says that it will create 5,000 new jobs and occupy 4 million to 5 million square feet of office space in the market. Oracle opened its Austin office campus in 2018, and the property supports 10,000 employees. Both companies have noted the business-friendly state and a large pool of tech workers as the reason for the move.

Hewlett Packard Enterprise Co. is also moving to the Lone Star state, but the firm is relocating to Houston, where it is building a new campus. Houston rivals Austin in terms of new apartment construction, with 28,600 new units in the pipeline, and more than 17,000 are landing in Houston proper. The city has been named the most popular market for corporate relocation and expansion.

San Antonio rounds out the list for apartment construction in the state with 10,900 new units in the pipeline.

Apartment construction has been robust in Texas for the last decade, with more than 500,000 new units in 2,000 new apartment buildings delivered in that time. Dallas has led the apartment construction activity with 177,400 new units added in the last 10 years, followed by Houston, which has seen 131,000 new apartment units come to market.

The apartment boom has also helped fuel growth in surrounding metros. Suburban Texas markets have grown in popularity among renters, many of which are offering many urban-style amenities found in the urban core, without the price tag and congestion. Texas has eight cities on RentCafe’s list of the top 20 suburbs in the US.

Understanding Prepayment Penalties

Mortgage loans are expensive to originate.  It is not uncommon for consumer mortgages to cost upwards of $9,000.  Lenders typically recoup those costs through a combination of upfront fees and interest revenue over the life of the loan. 

If a borrower pays off a loan shortly after origination, the lender is at risk of losing money on the loan. Enter prepayment penalties.  A prepayment penalty is a contractual clause that states the borrower is going to pay the lender an additional fee if the borrower pays the loan off early.  This really isn’t a penalty at all.  It is a way for the lender to make sure they don’t lose money on a loan.

For example a standard prepayment penalties with a 5 year structure of 5/4/3/2/1 structure. This means that if the borrower pays off the loan in year one, they have a 5% prepayment penalty, in year two, a 4% prepayment penalty, in year three, a 3% prepayment penalty, and so forth. So, you might be wondering how this affects the borrower, and the answer is, it depends on your investment strategy. Let’s dive in.

The rental investors looking to grow a legacy of rental properties and hold on to them long term (we call these properties “permanent rentals”) are not really affected by the prepayment penalty.  Since their investment strategy focuses on the lifetime of the loan, paying off the loan in the first five years is a moot point.

On the other hand, investors looking to purchase rental properties with flexibility to sell in the foreseeable future (we call these properties “transitional rentals”) are very concerned about the prepayment penalty. These investors are interested in market conditions and want to be able to sell the property at the right time without worrying about paying a penalty fee.

What is Rent to Income Ratio and How to Calculate It, Winston Rowe and Associates

The Importance of Rent to Income Ratio

A rent to income ratio determines the monthly or annual gross income a tenant must earn to be able to afford rent each month. This ratio is a useful and simple tool that helps tenants as well as landlords enter into a smooth rental agreement.

Using an income to rent calculator, landlords can analyze the ability of tenants to pay rent each month. As a result, it simplifies the process of tenant screening and shortlisting applicants.

Calculating Rent to Income Ratio

Here are two commonly used ways to calculate this ratio:

Calculate net income against a fixed rent percentage

This will help you determine the maximum amount you can afford to pay in rent each month. The industry standard is 30% of your income. In other words, no more than 30% of your annual income should go toward housing costs.

Its mathematical representation looks like this:

(Net earnings per year / 12) X 0.3 = Maximum monthly rental income

For example, suppose an applicant earns $150,000 per year. The income to rent ratio will be:

(150,000/12) X 0.3 = $3,750

Now, if the rental site asks for $4,000 per month, the applicant would fail to meet this condition. This is because their maximum monthly rental income does not reach the required limit. Therefore, the landlord might not find the candidate eligible for renting.

Use a ratio multiplier

Another method to calculate the rent to income ratio is to multiply the monthly rent value with a ratio multiplier. In this method, the standard multiplier is 3. This means that the applicant should make at least three times their gross monthly income to cover rental expenses. The math would look like this:

Monthly Rent X 3 = Minimum monthly rental income

Let’s consider an example to better understand. Suppose you are interested in renting an apartment that asks for $3,000 per month. Three times this rent amount becomes $9,000. This means you must gross a minimum of $9,000 per month in income to be eligible for consideration.

Pros & Cons of Rent to Income Calculations

Each month, a tenant’s paycheck likely goes toward many different bills and obligations. By gaining an understanding on how much monthly income is remaining, you’ll get a better idea of the ability to pay.

When landlords are recruiting good tenants, the rent to income ratio plays a very important role. It is the primary way to determine income requirements to rent properties based on monthly or annual earnings. This helps ensure that the tenant is able to afford rent each month.

As a landlord, you might not want to invest your time on ineligible tenants for your property. Calculating the gross income to rent ratio is an important step toward securing the right people for your rentals. Rather than going through the hassle of the screening process, use the rent-to-income ratio as your simple criteria instead.

However, ideal rent to salary ratio situations are not always as favorable as they sound. We know a lot of people aren’t that consistent in paying rents. Whereas, applicants who may not satisfy the income to rent ratio could be more responsible when it comes to paying rent on time.

Plus, some complexes make their income to rent apartment policies 3:1 . This might look like a lucrative option but in actuality, it prompts to a significant decline. Some tenants demonstrate a consistent ability to pay rent while others, with higher rent to income ratio, fail to provide steady deposits.

On the other hand, the 30% rule is a popular guideline for determining what percentage of income should go to rent. However, there are two big flaws associated with this rule. First, it doesn’t account for inflation and rising rental prices. Although rent prices are climbing more rapidly in some areas than others, average wage growth has been relatively flat since 2007. So, while rental rates are climbing, incomes aren’t necessarily keeping pace.

The second problem with the 30% rule is that it’s not personalized to your situation. It doesn’t take into account, for instance, how much student loan or credit card debt you might be paying off. Moreover, it also does not consider how much money you’re earning, your financial goals, or the condition of the real estate market where you are planning to rent.

Alternative ways to calculate rent to income ratio

As a rule of thumb, your income should be 40 times your rent, which is basically the same as 30% of your total salary. Almost every rent to income ratio calculator you find online uses this alternative way to calculate the ratio.

For example, suppose your income is $100,000 per year, the amount of rent you can afford each month can easily be evaluated as 30% of your total income divided by 12.

The math will look like this:

(0.3 * 100,000) / 12 = $2,500

Alternatively, you can divide the net amount by simply 40.

( 100,000 / 40) = $2,500

How Landlords Can Protect Themselves?

Calculating rent to income ratio might seem quite effortless and manageable, but it might partly hold a deficit for the landlord. Why? Because the landlord is not able to acknowledge the total worth of the tenant because of unspecified sources of income. The potential tenant may seem to have other financial obligations like loan percentage, fixed rate for insurance, and indemnification.

Even after thorough screening, some people may delude and provide false income documentation. In any case mentioned above, the landlord is fully granted the right to access all additional financial information of an applicant. Tenants should likely provide all credit card details with a proper financial report.

Before letting in a tenant, make sure that all the certified funds, cashiers’ checks, money orders, and records of all previous taxes of a year are officially provided. Even if your tenant qualifies as per the 30% rule, they may be overburdened with extra expenditures. In such cases, landlords need to assure ways to protect themselves.

Here’s how landlords can protect themselves:

Set up recurring rent payments

Auto-pay services provide a convenient method of direct deposit with rent deduction on a specified date. It also provides more assurance of getting paid on-time each month if payments are set up to recur.

Request a large deposit as a backup provision from any uncertainty or loss

A larger security deposit offers greater security because it can cover the landlord’s losses in case of damages or missed rent. Also, introduce several methods of rent payment. Get rent default insurance coverage to keep your income stable and regular.

Specify a co-signer on the lease

The co-signer is responsible to pay the dues in case the primary leaseholder cannot. The landlord should vet the co-signer as thoroughly as the tenant.

Run a thorough background check

Check the tenant’s background and inquire about past rental history. Also, check what your tenant presents as evidence. Cross-check all the references provided. Verify and validate all means of income sources. Gather data regarding any individual or collective payments or transactions. Once the property is rented, conduct routine inspections to prevent huge problems.

Rent to income ratio can benefit the landlord and tenant in many ways. It can help with budget planning for tenants looking to comfortably afford their rent. Whereas, it can prevent landlords from having tenants who may have difficulties paying their rent.

However, when it comes to screening and shortlisting a tenant, the rent to income ratio may not reveal enough about the tenant, their level of responsibility, or honesty. Therefore, all landlords should be running tenant credit checks, in addition to, calculating rent to income ratios.

A Comprehensive Guide for Apartment Manager

Apartment Building Lending No Up Front Fees Winston Rowe and Associates

With growing sizes of building complexes, apartment management is becoming one of the most challenging jobs. As an apartment manager, you are not only responsible for maintaining the building but the owner and tenants as well.

The main task of an apartment manager is to improve the client-tenant living experience. They need to reduce costs and increase profit whenever possible.

Many property managers often face many challenges when trying to manage rental property. It’s essential that the management of a property run smoothly just like any other business.

If you are an apartment manager or owner struggling to do your job, these quick tips will guide you through managing an apartment efficiently. So let’s begin then.

Important Points to Consider for Apartment Manager

1. Following the Housing Laws and Policies

2. Securing Your Property

3. Making the Apartment Desirable

4. Selecting the Right Tenant

5. Maintaining and Upkeeping the Society

6. Resolving Resident Complaints Immediately

Important Points to Consider for Apartment Manager

1. Following the Housing Laws and Policies

Some specific laws and regulations govern the professionals responsible for managing properties. Every state has its own set of rules and regulations which needs to be strictly followed.

In recent years, there have been reported cases of property managers where their actions have resulted in the unauthorized practice of law. That’s why apartment managers should work closely with legal counsel. It will ensure that they don’t unintentionally violate the law.

Get in touch with the lawyers who are familiar with the housing field. They will guide you through relevant policies. Let them know about your intentions and what you plan to do with the property.

Furthermore, take advice on tax liabilities and potential credits related to renting properties.

We would suggest that meet two to three lawyers in the beginning. Talk to them about your renting plans and then,  decide with whom you can work for a long time.

Hiring a good lawyer will ensure that you always stay on the right side of the law.

2. Securing Your Property

Owning a residential rental property is a wise investment. But at the same time, it can be quite risky especially if you are new to this field. Without the right building insurance, you can face severe financial loss if something goes wrong.

The primary concern for any apartment manager or owner is the protection of the property from catastrophic events. Your apartment complex insurance should protect you against losses, damages, liability claims, and other issues.

Property insurance can seem complicated at first. But you can always take the help of your lawyer and insurance agent to guide you through.

Also, you should know that the insurance coverage and its cost vary. It depends on factors like the building’s location, type of construction, and more.

Some of the risks that apartment building managers/owners have to deal with:

    Liability for tenant, employee, and visitor injuries

    Theft or vandalism

    Advertising liability

    Fire, storms, and other catastrophic damage

    Invading the right to privacy

    Loss of rental income

    Discrimination lawsuit filed by disgruntled tenants

    Any allegations of fraud or misconduct by tenants

You can tailor the insurance policies to one’s need to address the risks as mentioned above.

3. Making the Apartment Desirable

You can’t ignore the fact that for each day your property stays vacant, you lose potential rental income. If you want to attract quality tenants, make your apartment as desirable as possible.

How do you do that? A few simple fixes to help you make your property desirable to prospective tenants.

    The first thing any tenant would look at is the exterior paint. If it is not at par, the tenant may not even want to come inside. A few ways how you can fix it:

        Add some quality landscaping to increase the property’s curb appeal

        Remove chipped paint and get a new coat of exterior paint

        Repair broken banisters and replace torn window screens

        Keep the compound clean. Remove trash, weeds, and debris

        Make sure the lawn and shrubbery are well-manicured

    If you want to charge a hefty amount in monthly rent, then, of course, you would have to go the extra mile. Provide luxuries that many tenants would be gladly willing to pay for. For instance, you can consider adding an in-house dryer, energy-efficient appliances and more.

These small tricks will help bring in the quality of applicants.

4. Selecting the Right Tenant

The next step in the apartment management process is selecting the right tenant.

Renting out apartments can be stress-free only if you have the right tenants. For that, you would need to advertise the vacancy to let people know about your rental space.

I. Advertise the Empty Space

Even in places with high housing demands, advertise your space stating all the facts and your requirements. This will help draw the right kind of applicants to your rental house.

The ad should contain information such as your contact number, details about your apartment, and what up are looking for. Some of the places where you can advertise it are:

    Post it on newspaper

    Display it on Internet classified sites

    Connect with a real estate broker

II. Screen Tenants

Of course, you are not allowed to discriminate your tenants based on caste, creed, race, sex, etc.

However, you should screen tenants before renting your apartment to anyone. Make sure that they are financially sound to pay your rent and do not have any criminal background.

Otherwise, unsystematic screening and tenant selection often result in some significant headaches. You might end up with a tenant who pays the rent late or not at all and poorly maintained the place.

Your screening criteria should be the same for all. It should include:

    Run a background check on each applicant to ensure that they won’t conduct any illegal activities in your apartment

    Obtain a credit report to see if they can afford your rent and will be able to pay your rent on time

    Ask for references from previous landlords or other personal references if any

III. Get it in Writing

Once you have chosen your tenant, make sure that you have a lease agreement in place. It should contain all the terms and conditions agreed by both the parties.

Having it in writing will protect both you and your tenants in case of any conflict in the future. The rental agreement helps create good relation by specifying things. It includes clauses like how and when you handle tenant complaints and repair problems, notice period if the tenant decides to leave, and more.

The lease agreement should contain the following information:

    The names and signatures of the tenant(s) and landlord

    The starting and ending dates that the property will be rented

    Rent costs and due dates

    Policies on security deposits and lease termination

    The tenant’s responsibility to maintain the unit and pay for damage caused by any neglect

    Strategy and procedure for dealing with tenant’s complaints and repair request

    Mention the restrictions if any on tenant alterations on their apartment without your permission

    Information on any environmental hazards present at the property

    Other optional policies as required

You can always find lease templates online or even talk to your lawyer about what information to put in one.

Furthermore, a written agreement helps in running the property smoothly and enhance resale value. Make sure that the tenants are aware of all the clauses included before signing the lease.

IV. Ask For Security Deposits

Security deposits are used to cover the expenses in the event of any damages or other faults with the apartments when a tenant moves out. To avoid any dispute over the security deposit when the tenant moves out, it’s better to inspect and document the condition of the unit before they move in.

Specific regulations are governing the policies regarding security deposits. With the help of a lawyer, establish a system of setting, collecting, holding, and returning security deposits.

Also, check with your state’s Landlord Tenant Act to know how long before you can return the deposit and/or a settlement statement.

5. Maintaining and Upkeeping the Society

At times it may become difficult for the apartment manager to choose between areas which need more focus than others. But thanks to the technological advancement, the apartment management software that comes to our rescue.

Using society software, you can streamline all operations and handle it from a single place. Following these five quick tips will help in a better apartment management system:

I. Automate Society Billing & Accounting

Financial issues are always a serious matter. When the apartment size keeps getting bigger, maintaining accounts can get too time-consuming and challenging at times.

The process of accounting and bookkeeping, penalty calculation, and income and expense tracking should be streamlined for smooth functioning. The best way to do that is to employ a society management software that automates your billing and collection efforts.

Some of the essential modules of tenant management include document depository, penalty calculation, maintenance charge payment, payment gateway, request for quotation, and more. It integrates with the current system in place without disrupting the whole operation.

II. Communicate With Your Tenants Effectively

As an apartment manager, it’s essential that you maintain a healthy relationship with all your tenants. For that, you need to find an effective way of communication.

The smart move would be to incorporate an apartment management software that offers communication tools. These tools can post notices and reach out to everyone. Furthermore, it assists in other activities like securely sharing pictures from community events, broadcasting essential messages, and maintaining functions calendar.

You can also create and publish articles on waste management guidelines, festival celebration forums, and more. It will help you create one active community with the ease of the housing software.

III. Manage Apartment Facilities and Staff Smartly

Again, you will often find complaints about how the apartment facilities are not well maintained.

You can save yourself some time by automating all your task such as asset tracking, inventory management, maintenance staff, and more. With the help of society management software, you can save yourself the pain of manually overlooking every activity.

Moreover, the software will also empower your tenants to book an apartment facility online. You can keep records of visitors for security purpose. These are a few of the many benefits a useful apartment management software has to offer.

Provide a superior experience to residents by managing all apartment facilities smartly.

IV. Skillfully Manage Society Data

One of the many benefits of using society maintenance software is that you can easily centralize all your data in one place.

You need to maintain a directory of residents, the number of flats in the apartments and more, to systematically reach out to them. Using maintenance software will save you a lot of time and help effectively manage the condo.

6. Resolving Resident Complaints Immediately

Resident complaints will always be an issue for apartment managers. It is therefore essential to have a system in place that will help resolve their problems immediately.

Having a central tracking of resident complaints or suggestions can be a good idea for efficient management. That’s why the whole process of filing complaints and the manager resolving the issue needs to be automated.

To immediately attend to the tenant’s problem, you can do the following:

    Use software that will help you track the complaints at various stages. It should also send alerts in case of unresolved complaints

    Give tenants a number where they can reach the management department 24/7, to handle any emergencies

    Always have a few handymen on standby who can repair your apartments when need be

It will help you manage the apartment much better and increase resident satisfaction. Thus, it will enhance their faith in the management committee.

Wrapping it up

Apartment management may seem like a daunting task at first. Especially when there are tenants who try to create menace in society.

Sometime you would also need to take legal actions when necessary. Some tenants do not pay rent on time or conduct illegal activities on the premises. Sometimes, they even cause damage to the property or violate the lease agreement. In such cases, talk with your lawyer and proceed in the right way.

Or you can take the help of a mediator to work with you and your tenant to reach out a settlement on the issue. Either way, make sure that other residents in society do not face any inconvenience.

The Ins and Outs of Apartment Building Construction

Apartment Construction Lending No Upfront Fees Winston Rowe and Associates

In nearly every metro area of the country, building developers and contractors are scrambling to keep up with the growing demand for rental apartments. In 2014, nearly 350,000 apartments began construction. A number that increased by nearly 14% from 2013, according to the National Association of Home Builders.

However, even with a large number of projects underway, there are certainly no shortages of challenges that come with apartment construction and there are a number of variables to take factor in when considering the overall cost of commercial apartment construction.

From what type of amenities you will include with the building to the building’s walkability in the surrounding area and construction variables such as labor, weather, trade tariffs, it can be a challenge to construct the building of your dreams while staying within budget.

As apartment sizes are shrinking, tenants are turning to the amenities to help meet all of their needs while living there and driven property owners to great lengths to include must-have amenities for everyone. But when it comes to designing an amenities package and choosing what amenities to include there can often be a lot of “push and pull.” It is a careful space-planning exercise.

According to a 2015 survey from the National Multifamily Housing Council, amenities such as fitness areas, pools, and in-unit laundry machines were of greater interest to Millennials than to baby boomers and nearly 60% of the 120,000 person survey said they are interested in having a lounge area or party room in their apartment building.

For owners and developers, it is important to know which amenities will give the most return on investment. When designing a new apartment construction project, it pays to stay up on the trends of potential tenants.

Some amenities require not only an allocation of space, but significant ongoing maintenance and expenses while others can be installed at little initial or ongoing cost. Some can even save you money over time. The type of amenities you should include will come down to which amenities are valued most by renters, as well as age group and lifestyle.

Location and Walkability

Determining what amenities are right for any one community can be a challenge, but some amenities can be scaled back if the apartment exists within a surrounding community.

For some renters, location is the number one amenity. In a 2015 nationwide survey by the National Association of Realtors, roughly eight out of 10 people said that being in walking distance to community features like shops and parks was very important to them when considering a new place to live. Tenants care about the walkability of their living situation. If tenants live within walking distance of restaurants, bars, and gyms then forgoing some of those features can save on apartment construction cost.

However, apartment construction in a walkable city can be a challenge because there is limited space. Not only that, but land costs are also much higher for walkable, urban locations as opposed to rural areas. As a building developer, you will want to find ways to work with a municipality to provide useable sidewalks, trails, and open spaces to attract new renters and encourage a pedestrian-friendly experience for everyone.

Amenities and walkable communities aren’t the only things developers and contractors struggle with when it comes to apartment construction as there are a variety of other factors that can affect the final price.

Many apartment developers are fighting off price increases for things like labor shortage, weather conditions, and building materials due to international trade tariffs. In fact, according to data from the Bureau of Labor Statistics (BLS), even the threat of trade tariffs can affect the price of steel and lumber. In August of 2018, the producer price index for steel mill products jumped by 19 percent compared to the year before and while lumber and plywood also saw a sharp rise in the spring and early summer.

If you are planning to build an apartment building or are a current property owner looking to make upgrades, click below to contact us today!

Winston Rowe and Associates Construction Lending

Free Business And Real Estate Investing eBooks

Contact Winston Rowe and Associates

Welcome to Winston Rowe and Associates knowledge blog, scroll down to the right for posts about commercial real estate.

This is a list of free books about real estate investing, commercial real estate financing and business strategy.

We’re always on the lookout for great free books so bookmark this blog and check back for monthly updates.

These links are not affiliate marketing links, just publications that we feel may add value to people and businesses.

Commercial Real Estate Finance

The eBook Commercial Real Estate Finance, by Winston Rowe & Associates discusses the fundamentals of the different types of commercial property, the various options that are included with properties and the capabilities that you will have as a commercial property investor.

Real Estate Investing Articles

This is a link to 1226 real estate investing articles written by industry veteran’s.

25 Productivity Tips for Successful Business Owners

Productivity is critical to your success at work. Business owners, managers and executives all want to get the most from their employees. If you’re not performing as efficiently or effectively as others, your long-term job prospects could be in trouble.

Real Estate Investing: How to Find Cash Buyers and Motivated Sellers

“Real Estate Investing: How to Find Cash Buyers and Motivated Sellers” teaches real estate investors and those interested in learning to invest in real estate how to define and target ideal cash buyers and motivated sellers. The book covers absentee owners, rehab investors, Section 8 landlords, and other buyer types. Some of the marketing topics include mailing lists, postcards, both online and offline marketing strategies along with examples. Anyone who wants to wholesale a house or is curious about flipping houses should pick this book to get educated on cash buyers and motivated sellers for their real estate investing.

Real Estate – Breaking Bad How to Flip Decaying Real Estate Properties for Profit

Tired of working 9 to 5? You should think of making money with real estate! Yes, the effort is well worth it! You just have to ditch the misconceptions and embark with all the passion you have in store for this amazing trip of rehabbing old houses and giving them a new look and a new owner.  Your reward? A nice profit!

Real Estate Forms Portfolio

A FREE and ready-for-download eBook consisting of a comprehensive collection of real estate-related forms for real estate investors.

Real Estate Secrets Exposed

This FREE e-Book sheds some light on the often mysterious and sometimes daunting world of real estate.

Use 1031 Real Estate Exchanges to Create Multiple Streams of Income

Discover how to use 1031 tax-free exchanges, tenants in common interests, and zero cash flow properties to create new sources of income. Learn how to offer bundled services and attract new clients. This FREE, ready for download eBook is perfect for anyone involved in real estate, taxes, mortgages, insurance, or law.  Download it now!

Make Money Through Real Estate Renovations

Download this FREE eBook and learn how a successful investor makes thousands of dollars from real estate renovations. Download it now!

Discover the Secrets of How to Fund Your Real Estate Deals with Private Lenders

Download this FREE e-Book, and discover the new secrets of funding real estate deals in the post-bubble real estate market, where traditional lending sources are getting very difficult to obtain. Download it today!

Real Estate Investing Strategy for Rehabs

This eBook is about residential rehabbing and the multiple strategies that can be used to maximize profits in this current economic climate. My goal has always been to share knowledge with folks that are truly interested in rehabbing and view it as not only for monetary gain but also see is as an “art and science” like I do. Happy Rehabbing!!

How to Be A Super Property Investor

A FREE, step-by-step guide that will help you become a super real estate property investor. Learn all the basic and some advanced investing techniques that have generated millions for property investors. Ready for download now!

Financial Terms Dictionary – 100 Most Popular Financial Terms Explained

This practical financial dictionary helps you understand and comprehend more than 100 common financial terms. It was written with an emphasis to quickly grasp the context without using jargon. Every terms is explained in detail with 600 words or more and includes also examples. It is based on common usage as practiced by financial professionals.

The Prince by Niccolò Machiavelli

Niccolò di Bernardo dei Machiavelli was an Italian diplomat, politician, historian, philosopher, writer, playwright and poet of the Renaissance period. He has often been called the father of modern political philosophy and political science.

The Science of Getting Rich by W. D. Wattles

This book is pragmatical, not philosophical; a practical manual, not a treatise upon theories. It is intended for the men and women whose most pressing need is for money; who wish to get rich first, and philosophize afterward. It is for those who have, so far, found neither the time, the means, nor the opportunity to go deeply into the study of metaphysics, but who want results and who are willing to take the conclusions of science as a basis for action, without going into all the processes by which those conclusions were reached.

Sun Tzu Art of War

Written in the fifth century B.C., Suntzu and Wutzu still remain the most celebrated works on war in the literature of China. While the chariot has gone, and weapons have changed, these ancient masters have held their own, since they deal chiefly with the fundamental principles of war, with the influence of politics and human nature on military operations; and they show in a most striking way how unchanging these principles are.

Make Extra Money Flipping Houses While On Vacation by Jason Medley

Reveals his simple and proven systems to automate, delegate and outsource nearly every function of his business except cashing his checks. He shows the exact steps that has allowed him to go on multiple vacations with his family throughout the year while having his system continue to flip houses for him.

Achieving Wealth Through Real Estate: A Definitive Guide To Controlling Your Own Financial Destiny Through a Successful Real Estate Business

Have you ever thought about making money with real estate? In Achieving Wealth Through Real Estate: A Definitive Guide to Controlling Your Own Financial Destiny Through a Successful Real Estate Business, author and entrepreneur Kirill Bensonoff takes you through the process of starting your own real estate business step-by-step, featuring his expert tips and tricks.

Business Loans Uncovered

Knowing if you qualify is one of the most important things to know when applying  for a loan of any type. Blindly applying for a loan and being declined increases the chances of you being declined again and again because you not only lower your credit score each time you apply, multiple inquires also serves a red flag to other lenders and as a result lenders put you in a high risk category and charge higher interest rates in the event of an approval Includes: ​Traditional Lenders, Government Sources, The 7(a) loan guarantee program, SBA Low Doc loan program, SBA Express loan program, Factoring, Venture Capitalists, Angel Investors.

50 Simple Secrets To Be A Happy Real Estate Investor

Discover the secrets used by successful real estate investors to create happiness in their lives and businesses. Naturally create more happiness for yourself by implementing time-tested secrets to happiness used by other real estate professional and investors just like you. Start to experience more productivity, satisfaction, and success immediately.

50 Simple Secrets To Be A Happy Real Estate Investor

Discover the secrets used by successful real estate investors to create happiness in their lives and businesses. Naturally create more happiness for yourself by implementing time-tested secrets to happiness used by other real estate professional and investors just like you. Start to experience more productivity, satisfaction, and success immediately.

Marketing Strategies for Real Estate Photography

One of the biggest problems that real estate photographers have once they have set up their business as a legal entity, obtained all the right equipment and perfected their technique is obtaining new clients.

Clients and customers are the lifeblood of any business, but how do you obtain new clients after starting your business?

By developing and executing a strategic marketing plan tailored to your business.

This short guide has been written to help real estate photographers develop their marketing plan and assist with winning new business.

It includes a series of digital and direct marketing strategies along with useful tips and lessons the author has learned from his own experiences that can save you time and money when growing your business.

A marketing action plan template has been included to help photographers execute the strategies learned in this guide book.

Books by Dr William Edward Deming

William Edwards Deming (October 14, 1900 – December 20, 1993) was an American engineer, statistician, professor, author, lecturer, and management consultant.

Educated initially as an electrical engineer and later specializing in mathematical physics, he helped develop the sampling techniques still used by the U.S. Department of the Census and the Bureau of Labor Statistics.

In his book The New Economics for Industry, Government, and Education Deming championed the work of Walter Shewhart, including statistical process control, operational definitions, and what Deming called the “Shewhart Cycle, which had evolved into Plan-Do-Study-Act (PDSA). That was in response to the growing popularity of PDCA, which Deming viewed as tampering with the meaning of Shewhart’s original work.

Deming is best known for his work in Japan after WWII, particularly his work with the leaders of Japanese industry. That work began in July and August 1950, in Tokyo and at the Hakone Convention Center, when Deming delivered speeches on what he called “Statistical Product Quality Administration”.

Many in Japan credit Deming as one of the inspirations for what has become known as the Japanese post-war economic miracle of 1950 to 1960, when Japan rose from the ashes of war on the road to becoming the second-largest economy in the world through processes partially influenced by the ideas Deming taught

Commercial Loan Programs

Commercial Loan Programs

Winston Rowe and Associates has almost 200 capital sources nationwide. This enables us to provide a full spectrum of options to clients that traditional banks and many lenders can-not.

Capital Deployment:

  • $1,000,000. – $50,000,000.
  • 48 Contiguous US States Only
  • SBA, Hard Money, Bridge, Portfolio, CMBS, Conventional, Private Capital, Preferred Equity, Mezzanine and Private Equity.

Loan to Value Criteria:

  • Refinance 70% – 80%
  • Purchase 70% – 80%
  • Cash Out Refinance 70% – 80%

Documentation Criteria:

  • Full and Limited
  • No FICO or Low FICO Score
  • Asset Value Only
  • Income Approach / Cash Flow Only

Basic Underwriting / Due Diligence Criteria:

  • Personal Financial Statement
  • Purchase Agreement
  • Three Bureau Credit Report
  • Use of Proceeds for Cash Out
  • Valid Government Issued Photo ID
  • Completed and Signed Transaction Summary Questionnaire from Winston Rowe & Associates
  • Populated Supporting Document Due Diligence List. Pursuant to the specific transaction type.

Commercial Property Types:

  • Our capital sources will consider vacant and occupied commercial properties.
  • All commercial property types considered.