Types of Multifamily Financing: Rates, Terms & Qualifications

Types of Multifamily Financing: Rates, Terms & Qualifications

Multifamily financing is a mortgage used for the purchase or refinancing of smaller multifamily properties that have two to four units and large apartment buildings that have five or more units. Multifamily loans are a good tool for both first-time real estate investors and seasoned professionals. Rates are generally between 4.5 percent and 12 percent with terms up to 35 years.

If you’re looking for a permanent multifamily loan for rental units you can check out Visio Lending. They’re a national lender that can finance 2 – 4-unit buildings up to 80% LTV. Terms are 30 years with fixed or variable competitive rates. Apply online today and get pre-qualified in a few minutes.

4 Types of Multifamily Loans

Type of Multifamily Loans

Conventional Multifamily Mortgage

Investor who wants to purchase a 2-4-unit building in good condition and may already have a banking relationship with a traditional lender

Government Backed Multifamily Mortgage

Owner-occupant of a 2-4-unit property or large investor who wants to use an FHA multifamily loan to purchase a 5+ unit building

Portfolio Multifamily Loan

An investor who doesn’t meet the qualifications of a conventional mortgage or an investor who wants to finance multiple properties at once

Short Term Multifamily Loan

A fix-and-flip investor who wants to purchase a distressed property quickly

  1. Conventional Mortgage for Multifamily Properties

Conventional mortgages for buying a multifamily home are permanent “conforming” loans offered by traditional banks and lending institutions. These mortgages have terms of 15 to 30 years and can finance multifamily properties between two and four units but can’t finance apartment buildings with five or more units. Conventional mortgages are conforming because they typically adhere to Fannie Mae’s required qualifications and maximum loan amounts. However, they aren’t backed by the federal government.

Conventional mortgages for multifamily homes are right for investors who want a long loan term. They’re right for investors who purchase a multifamily property that has already been rehabbed. They’re also right for investors who already have a banking relationship with a financial institution that offers multifamily loans.

The rates found on a conventional mortgage can be either fixed or variable. Fixed rates are fully amortized throughout the loan’s term while variable rates typically reset after a seven- to 10-year period. Variable interest rates are based on the six-month stated Intercontinental Exchange London

Where to Find a Conventional Mortgage for Multifamily Properties

You can use Winston Rowe and Associates to connect with multiple lenders and receive multiple offers at once. They can help you find the best rates, terms and fees on your conventional mortgage quickly.

  1. Government-backed Multifamily Financing

Government-backed multifamily financing is multifamily loans sponsored by Fannie Mae and Freddie Mac as well as the Federal Housing Administration (FHA). There are more than five government-backed multifamily financing options, which can either finance properties with two to four units or properties with five or more units.

Government-backed multifamily loans are right for investors who want to live in one of the units and rent out the other units. Investors who only have a small down payment can also benefit from government-backed multifamily loans. They’re also right for larger investors who want to purchase a five or more-unit property with an FHA multifamily loan.

Fannie Mae and Freddie Mac also have multifamily financing loans that can finance properties with five or more units. These government-backed loans are often referred to as “small balance loans” or “multifamily loans.”

Both Fannie Mae and Freddie Mac multifamily loans have terms between five and 35 years. The time to approval and funding with these multifamily loans can be 60 to 90 days. For FHA-backed multifamily loans, the term can be as long as 35 years. Because there are more regulations and guidelines with FHA loans, the time to approval and funding is longer at 60 to 180 days.

Fannie Mae and Freddie Mac’s multifamily financing options together can fund the purchase of a multifamily property between two and five units or more. Just remember that the conforming loans can finance properties between two and four units while the nonconforming multifamily loans can finance properties of five or more units.

The Fannie Mae, Freddie Mac and FHA multifamily financing options are originated and offered by government-approved mortgage lenders. For example, the Commercial Real Estate Finance Company of America offers all government-backed multifamily loan options.

  1. Portfolio Loan for Multifamily Properties

A portfolio loan for multifamily properties is a nonconforming loan used to purchase a multifamily property between two and five or more units. Portfolio loans for multifamily properties are permanent mortgages with terms between three and 30 years.

These types of multifamily loans are right for investors who need more flexible multifamily loan requirements. They’re also right for investors who want to finance multiple properties at once because they can finance four to 10 properties simultaneously.

Where to Find Portfolio Loans for Multifamily Financing

Remember that since portfolio loans are nonconforming loans, they’re offered by lenders of all shapes and sizes. Traditional banks, credit unions and savings and loans, as well as private lenders, can all offer portfolio loans.

Winston Rowe and Associates capital sources offer multifamily portfolio loans for rental properties with two to four units. The national lender can finance up to 80 percent LTV. Terms are 30 years with fixed or variable rates that are competitive. Apply online and pre-qualify in minutes.

  1. Short-term Multifamily Financing

Short-term multifamily financing is a non-permanent multifamily loan option with terms that range from six to 36 months. These loans include both hard money loans and bridge loans with monthly payments that are usually interest-only.

Short-term multifamily financing loans are right for investors that want to season, renovate or increase the occupancy a multifamily property in order to meet the stricter requirements of a permanent multifamily loan. Furthermore, some investors use these non-permanent options to buy a property and wait until they meet the personal qualifications before refinancing.

The LTV ratio is based on a multifamily property’s current fair market value and is used to finance properties in good condition. The loan-to-cost (LTC) ratio, on the other hand, is based on the combined costs of purchasing and renovating a multifamily property and is used for properties in poor condition. This means that an investor should expect to cover 10 percent or more of a property’s purchase price or 25 percent or more of a property’s purchase price plus renovation costs.

Permanent Multifamily Financing Options

Permanent multifamily mortgages have repayment terms of five to 35 years and have a loan-to-value ratio (LTV) of up to 87 percent. Interest rates range between 4 percent to 6 percent and rates can be fixed or variable. Permanent multifamily mortgages are the most common type of multifamily financing and account for 93 percent of outstanding multifamily loans.

Although permanent loans are generally long term, there are some shorter options. For example, government agencies offer loans that have terms between five to 10 years.

These multi-family loans are right for:

Investors who intend to pay off a multifamily loan within 10 years

Investors who need lower payments at the start of the loan

Investors who want an adjustable rate loan

Investors who want to renovate a multifamily property during a five to 10-year period

On the other hand, long-term permanent multifamily loans have terms between 10 to 35 years. Monthly payments are typically amortized during the entire term. What’s more, interest rates are typically fixed.

Long-term permanent multifamily financing options are right for the following investors:

Investors looking to purchase a long-term multifamily property

Investors looking to refinance an existing multifamily property

Investors looking to cash out refinance an existing multifamily property

Temporary Multifamily Financing Options

Temporary (short-term) multifamily loans, such as hard money loans, are mortgages with terms between six and 36 months. Monthly payments are typically interest-only with fixed rates between 4 percent to 12 percent or more. Temporary multifamily financing options are used to purchase, renovate, season or sell a multifamily property before refinancing to a permanent mortgage at a later date.

Theses temporary multifamily loans are right for:

Investors who need to season a multifamily property

Investors who need to increase the occupancy rate of a multifamily property

Investors who may want to renovate a multifamily property

Investors who don’t meet the stricter qualifications of a permanent multifamily loan

Investors who need to compete with all-cash buyers

Overall, investors of multifamily properties should be willing to be active in the management of the property. They should have at least nine months cash reserves not only to cover monthly loan payments through vacancy periods but also to cover unforeseen repairs as needed.

What Qualifies as a Multifamily Home?

A multifamily property is generally a residential property with two to four separate units. This is how lenders define a multifamily property. However, the FHA considers a multifamily property one that has five or more units.

Multifamily loans are used by investors to finance multifamily properties between two and five or more units. These properties can include condos, town homes, duplexes, apartment buildings and more. However, there are many different multifamily financing options available and it’s important to understand the best ways to invest in real estate.

Tech Solutions Every Multifamily Investor Should Know

Tech Solutions Every Multifamily Investor Should Know

Remember the days where finding and closing on a real estate deal averaged month? We’re pleased those days are long gone. Technology supplies small and large multifamily investors with the tools to speed up the acquisition, management, and disposition processes.

Choosing the right tool could mean the difference between closing in days or weeks, tenant retention or high turnover, and a low or high net operating income. The following six multifamily technology providers can play an important part in maximizing your investment.

Find a Multifamily Investment Property: LoopNet.Com

Searching for a multifamily investment property? Try the comprehensive commercial property marketplace LoopNet. Search over 800,000 commercial listings, 1.6 million sales comps, and 25 million property records. Their search engine narrows result by multifamily properties for sale in your area, helping investors find apartment buildings, duplexes, triplexes, and other multifamily dwellings. LoopNet is available as a mobile search app. When you are ready to sell your multifamily property, return to LoopNet.

Gather Data Intelligence: redIQ

RedIQ combines data analytics and visualization tools to help multifamily investors better evaluate investment decisions. The platform reduces the time required in capturing rent roll and operating statements, standardizing the data, and analyzing the trends and outliers. Easily compare the property’s performance against comparable properties. RedIQ is designed to eliminate manual data entry and generate a faster turnaround for the multifamily industry.

Monitor Project Progress: Honest Buildings

A leader in project management and procurement, Honest Buildings helps multifamily owners and investors track a project’s budget and timeline to completion. Asset management and construction teams use the features to collaboratively track costs, compare bids, and analyze data for better decisions. Honest Buildings’ platform automates administrative actions while keeping all parties up-to-date on progress. Project data is accessible from any device, desktop or mobile.

Manage the Property: RealPage

RealPage is an expansive suite of integrated property management, asset optimization, investment management, resident services, and leasing solutions. Their tools automate billing processes and aim to boost net operating income across the board. The facilities app integrates with OneSite Leasing & Rents. Residents can request service 24/7. Resident Technology Services assists with establishing technology infrastructure like high-speed Internet access and Internet of Things (IoT) amenities.

RealPage’s Asset and Investment Management (AIM) services streamline all the functions necessary to manage your multifamily portfolio. Their scalable real estate investment accounting service simplifies capital transactions, financial statements, and measures profit center performance. The RealPage Portfolio Asset Management (PAM) marries data and metrics for better decision-making. Analyze financial operating data in easy-to-read dashboards. Understand a property’s performance and its trends. The PAM works with any property accounting system already in place.

Optimize Your Multifamily Portfolio: Rentlytics

Understanding property performance data once required a lot of labor and manpower to analyze multiple spreadsheets. Rentlytics simplifies how multifamily real estate investors and managers analyze property and portfolio data. All information on delinquency, financial history, budget variance, occupancy, and rents is compiled into an easy-to-understand dashboard. The automated process helps multifamily investors identify and predict trends.

Marketing Solutions: RentPath

RentPath simplifies digital marketing solutions, helping find the right renters for the right property. Their marketing network includes Apartment Guide, Rent.com, and Rentals.com. Marketing combination packages include listing the property on top rental websites, high definition photoshoots, reports and analytics, easy updates, and lead capture forms. Monitor prospect calls with call recording to screen applicants. Leverage certified resident ratings and reviews to boost your property’s reputation. Mobile-optimized websites are available, and additional features vary according to the RentPath marketing package.

4 Types of Multifamily Financing: Rates, Terms & Qualifications Winston Rowe and Associates

4 Types of Multifamily Financing: Rates, Terms & Qualifications Winston Rowe and Associates

Multifamily financing is a mortgage used for the purchase or refinancing of smaller multifamily properties that have two to four units and large apartment buildings that have five or more units. Multifamily loans are a good tool for both first-time real estate investors and seasoned professionals. Rates are generally between 4.5 percent and 12 percent with terms up to 35 years.

  1. Conventional Mortgage for Multifamily Properties

Conventional mortgages for buying a multifamily home are permanent “conforming” loans offered by traditional banks and lending institutions. These mortgages have terms of 15 to 30 years and can finance multifamily properties between two and four units but can’t finance apartment buildings with five or more units. Conventional mortgages are conforming because they typically adhere to Fannie Mae’s required qualifications and maximum loan amounts. However, they aren’t backed by the federal government.

Conventional mortgages for multifamily homes are right for investors who want a long loan term. They’re right for investors who purchase a multifamily property that has already been rehabbed. They’re also right for investors who already have a banking relationship with a financial institution that offers multifamily loans.

Multifamily Conventional Mortgage Loan Amounts

Conventional multifamily loan amount and down payment are:

Two-unit property: $533,800 to $800,755

Three-unit property: $645,300 to $967,950

Four-unit property: $801,950 to $1,202,925

LTV: Up to 80 percent

Down payment: 20 percent or more

Keep in mind that these maximum loan amounts are regional and higher cost areas like Hawaii have higher maximum loan limits. An investor’s typical down payment with a conventional multifamily loan is 20 percent or more of the property’s purchase price. This is fairly standard when compared to more traditional residential property loans.

Conventional multifamily mortgage costs are generally:

Rates: 4.5 percent to 6.5 percent

Loan origination fees: 0 percent to 3 percent

Closing costs: 2 percent to 5 percent

The rates found on a conventional mortgage can be either fixed or variable. Fixed rates are fully amortized throughout the loan’s term while variable rates typically reset after a seven- to 10-year period. Variable interest rates are based on the six-month stated Intercontinental Exchange London Interbank offered rate (LIBOR), and there is usually a cap equal to the starting interest rate plus 5 percent to 6 percent.

You might also be charged a minimum $500 appraisal fee as well as an application fee that’s typically around $100 to $200. The application fee will sometimes cover the appraisal. Loan origination fees and closing costs are typically taken directly out of the loan.

Conventional multifamily mortgage terms are generally:

Term: 15 to 30 years

Funding time: 30 to 45 days

Conventional Multifamily Mortgage Loan Requirements

Conventional multifamily loan qualifications are generally:

Units: 2 to 4

Credit score: 680 or more (check your credit score for free here)

DSCR: 1.25 or higher, which is the amount of cash flow available to cover debt payments

Cash reserves: 6 to 12 months

If you have a property with five or more units, you’ll want to look into government-backed multifamily loans and multifamily portfolio loans. Further, conventional mortgages typically don’t finance a rehab or renovation project. Therefore, the second qualification you need to mind is that all multifamily properties have to be in good condition prior to financing.

  1. Government-backed Multifamily Financing

Government-backed multifamily financing is multifamily loans sponsored by Fannie Mae and Freddie Mac as well as the Federal Housing Administration (FHA). There are more than five government-backed multifamily financing options, which can either finance properties with two to four units or properties with five or more units.

Government-backed multifamily loans are right for investors who want to live in one of the units and rent out the other units. Investors who only have a small down payment can also benefit from government-backed multifamily loans. They’re also right for larger investors who want to purchase a five or more unit property with an FHA multifamily loan.

Government-backed loan amount and down payments are generally:

Two-unit property: $533,800 to $800,755

Three-unit property: $645,300 to $967,950

Four-unit property: $801,950 to $1,202,925

LTV: Up to 80 percent

Down payment: 3.5 percent or more

Government-backed loans have the following loan amounts:

Fannie Mae: $750,000 to $3 million or more

Freddie Mac: $1 million to $6 million or more

The FHA offers multifamily loans for properties with five or more units. The minimum loan amount is $1 million and there is no maximum amount. However, the FHA 223(f) apartment loan can finance up to 87 percent of a property’s LTV, meaning that the down payment would only be 13 percent or more of the purchase price.

Government-backed multifamily loan rates include:

Rate: 5 percent to 7 percent or higher

Loan origination fees: 0 percent to 1 percent

Closing costs: 2 percent to 5 percent

Prepayment penalty: 1 percent

These costs are usually taken directly out of the loan and aren’t considered out-of-pocket costs. Fannie Mae and Freddie Mac multifamily loans with longer terms have fixed rates that are fully amortized and shorter-term loans can have fixed or variable rates. FHA rates are fixed over the entire term. Fixed rates are typically amortized over the term of the loan while variable interest rates adjust after three to 10 years based on the current six-month LIBOR rate.

In contrast, FHA 223(f) loan costs are generally:

Loan origination fees: 0 percent to 3 percent

Closing costs: 2 percent to 5 percent

FHA inspection fee: 1 percent or more

Mortgage insurance premium: 1 percent

Legal fees: $10,000 or more

Government-backed Multifamily Financing Terms

The terms for government-backed multifamily loans are:

Term: 5 to 35 years

Funding time: 60 to 180 days

Both Fannie Mae and Freddie Mac multifamily loans have terms between five and 35 years. The time to approval and funding with these multifamily loans can be 60 to 90 days. For FHA-backed multifamily loans, the term can be as long as 35 years. Because there are more regulations and guidelines with FHA loans, the time to approval and funding is longer at 60 to 180 days.

Government-backed Multifamily Mortgage Loan Requirements

The qualifications for government-backed multifamily loans are:

Units: 2 or more

Credit score: 650 to 680 or higher (check your credit score for free here),

DSCR: 1.25 or higher, which is the amount of cash flow available to cover debt payments

Occupancy: 85 percent to 90 percent or more

Liquidity: At least 9 months

Occupancy: At least 3 months

FHA multifamily loan qualifications are:

Units: 5 or more

Credit score: 650 or higher (check your credit score for free here),

DSCR: 1.15 or higher

Occupancy: 95 percent or higher

Liquidity: At least 9 months

Occupancy: At least 6 months

Fannie Mae and Freddie Mac’s multifamily financing options together can fund the purchase of a multifamily property between two and five units or more. Just remember that the conforming loans can finance properties between two and four units while the nonconforming multifamily loans can finance properties of five or more units.

Where to Find Government-backed Multifamily Financing

The Fannie Mae, Freddie Mac and FHA multifamily financing options are originated and offered by government-approved mortgage lenders. For example, the Commercial Real Estate Finance Company of America offers all government-backed multifamily loan options.

  1. Portfolio Loan for Multifamily Properties

A portfolio loan for multifamily properties is a nonconforming loan used to purchase a multifamily property between two and five or more units. Portfolio loans for multifamily properties are permanent mortgages with terms between three and 30 years.

These types of multifamily loans are right for investors who need more flexible multifamily loan requirements. They’re also right for investors who want to finance multiple properties at once because they can finance four to 10 properties simultaneously.

Multifamily portfolio loan amount and down payment are generally:

Minimum loan amount: $100,000 or more

Maximum loan amount: Depends on the lender

LTV: Up to 97 percent

Down payment: 3 percent or more

Portfolio loans for multifamily financing aren’t required to meet Fannie Mae or the other government organization’s requirements for maximum loan amounts and down payments. This means that portfolio loans are more flexible than conforming multifamily loans.

Portfolio multifamily loan rates are generally:

Rates: 5 to 6 percent or higher

Loan origination fees: 0 percent to 3 percent

Closing costs: 2 percent to five percent

Prepayment penalty: 1 percent

These costs are taken directly out of the loan and their interest rates can be either fixed or variable. Like the other multifamily loans, variable interest rates are typically fixed for five to 10 years before adjusting every six months based on the six-month LIBOR rate.

Terms for multifamily portfolio loans are generally:

Term: 3 to 30 years

Funding time: 30 to 45 days

The most common types of portfolio loans for multifamily financing will often have a term of 15 to 30 years. The usual time to approval and funding is between 30 to 45 days.

Portfolio multifamily loan qualifications are generally:

Units: 2 to 5 or more

Credit score: 600 or higher (check your credit score for free here),

DSCR: 1.25 or higher

Occupancy Rate: 90 percent or higher

Liquidity: 9 months or more

Occupancy: 3 months or more

  1. Short-term Multifamily Financing

Short-term multifamily financing is a non-permanent multifamily loan option with terms that range from six to 36 months. These loans include both hard money loans and bridge loans with monthly payments that are usually interest-only.

Short-term multifamily financing loans are right for investors that want to season, renovate or increase the occupancy a multifamily property in order to meet the stricter requirements of a permanent multifamily loan. Furthermore, some investors use these non-permanent options to buy a property and wait until they meet the personal qualifications before refinancing.

Short-term multifamily loan amounts and down payments are generally:

Minimum loan amount: $100,000 percent

Maximum loan amount: Varies by lender

LTV: Up to 90 percent

LTC: Up to 75 percent

Down payment: 10 percent or more

The LTV ratio is based on a multifamily property’s current fair market value and is used to finance properties in good condition. The loan-to-cost (LTC) ratio, on the other hand, is based on the combined costs of purchasing and renovating a multifamily property and is used for properties in poor condition. This means that an investor should expect to cover 10 percent or more of a property’s purchase price or 25 percent or more of a property’s purchase price plus renovation costs.

Rates on short-term multifamily loans are generally:

Hard money loan rates: 7.5 to 12 percent or more

Bridge loan rates: 5 to 12 percent or more

Loan origination fees: 1 percent to 3 percent

Exit fee: 1 percent

Extension fee: 1 percent

Prepayment penalty: 1 percent

These costs are typically taken out of the loan and don’t come out-of-pocket. The interest rates found on short-term multifamily financing options vary widely depending on the type of loan and the lender.

Short term multifamily financing terms are typically:

Term: 6 to 36 months

Funding time: 10 to 45 days

The terms of a non-permanent multifamily financing option are short and typically between six to 36 months. This means that investors will typically either have to flip the property or refinance with a permanent multifamily loan at the end of the term.

However, the time to approval and funding is also short, making it advantageous for investors who need to compete with all-cash buyers. For hard money loans, the typical time to funding is between 10 to 15 days. For bridge loans, the time to funding is between 15 to 45 days.

The qualifications of short-term multifamily financing are generally:

Units: 2 to 5 or more

Credit score: 550 or higher (check your credit score for free here),

Experience: 2 or 3 past rehab projects or multifamily experience

Subordinated debt: None

Typically bridge loan qualifications are:

Units: 2 to 5 or more

Credit score: 640 or higher (check your credit score for free here),

Experience: 2 or 3 past rehab projects or multifamily experience

Subordinated debt: None

Interest reserve: Required for properties below 1.05 debt-service coverage ratio (DSCR)

Where to Find Short Term Multifamily Financing

Hard money lenders like Patch of Land offer 12- to 24-month short-term financing options for two- to four-unit buildings, condominiums, town homes and multifamily apartments. You can borrow up to 85 percent LTV with a max of $3 million. Interest rates start at 8 percent and their application can take minutes.

How Multifamily Financing Works

Multifamily mortgages can finance two types of properties. The first is a residential investment property with two to four units. The second is an apartment building with five or more units. This distinction between the types is important because the number of units dictates the types of multifamily financing options.

 

For example, conventional mortgages can only finance residential income properties between two to four units. Government-sponsored loans and short-term financing options, on the other hand, can finance both residential income properties as well as apartment buildings with five or more units.

Permanent Multifamily Financing Options

Permanent multifamily mortgages have repayment terms of five to 35 years and have a loan-to-value ratio (LTV) of up to 87 percent. Interest rates range between 4 percent to 6 percent and rates can be fixed or variable. Permanent multifamily mortgages are the most common type of multifamily financing and account for 93 percent of outstanding multifamily loans.

Although permanent loans are generally long term, there are some shorter options. For example, government agencies offer loans that have terms between five to 10 years.

These multi-family loans are right for:

Investors who intend to pay off a multifamily loan within 10 years

Investors who need lower payments at the start of the loan

Investors who want an adjustable rate loan

Investors who want to renovate a multifamily property during a five to 10 year period

On the other hand, long-term permanent multifamily loans have terms between 10 to 35 years. Monthly payments are typically amortized during the entire term. What’s more, interest rates are typically fixed.

Long-term permanent multifamily financing options are right for the following investors:

Temporary Multifamily Financing Options

Temporary (short-term) multifamily loans, such as hard money loans, are mortgages with terms between six and 36 months. Monthly payments are typically interest-only with fixed rates between 4 percent to 12 percent or more. Temporary multifamily financing options are used to purchase, renovate, season or sell a multifamily property before refinancing to a permanent mortgage at a later date.

Theses temporary multifamily loans are right for:

Investors who need to season a multifamily property

Investors who need to increase the occupancy rate of a multifamily property

Investors who may want to renovate a multifamily property

Investors who don’t meet the stricter qualifications of a permanent multifamily loan

Investors who need to compete with all-cash buyers

Overall, investors of multifamily properties should be willing to be active in the management of the property. They should have at least nine months cash reserves not only to cover monthly loan payments through vacancy periods but also to cover unforeseen repairs as needed.

 

Apartment Building Loans No Upfront Fees Winston Rowe & Associates

Apartment Building Loans No Upfront Fees Winston Rowe & Associates

Real Estate Investing

Winston Rowe & Associates a national no upfront fee apartment loan and financing firm. With direct access to the most aggressive investor sources in the world, they can structure a customized financing solution for clients, with the best terms possible.

Winston Rowe & Associates Capital Deployment Objectives:

No upfront or advance fees
Loan amounts starting from $1,000,000 to $500,000,000
Private or hard money funds available for a quick close
Debt coverage ratios (DSCR) from 1.20 and up
All property types considered
Construction, Bridge, or Permanent Financing
Adjustable Loans, Fixed Loans, or Interest Only Loans
Loan to cost increased with mezzanine financing
Loan to value increased with mezzanine financing

At Winston Rowe & Associates, their primary objective is to provide the most reliable and efficient means of sourcing both debt and equity for your commercial real estate loans. Recognizing that people and relationships drive this business, they are staffed with some of the industry’s most committed professionals.

How To Purchase An Apartment Complex

How To Purchase An Apartment Complex

Buying an apartment complex is a long, sometimes complicated, process. It’s important for you to gather as much information as you can before you make the decision to buy. Applying for a mortgage to finance an apartment complex is not at all similar to applying for a home mortgage. Apartment complexes with four or more units are commercial properties, and loans for them have different underwriting rules.

Types of Properties:

Decide if you want to purchase a residential apartment complex of a mixed-use building. A mixed-use building has a combination of office and residential units, but at least 80% of the space has to be residential. The complex has to have a grade of C+ or higher. This means you can’t rent the units daily or weekly, and the units can’t be single-occupancy, as in a rooming house or motel.

Gather information about the building you would like to buy. You may not be able to get a loan if the building will require excessive maintenance, or if the complex has not had 90% occupancy for the three months immediately preceding your loan application.

Background:

Talk to local real estate agents. Get their advice about the location you have in mind. Inquire about the possibilities of future zoning changes or any public works projects that may impact an income producing property. If there are plans for a regional airport to be built a few miles away in the next few years, for example, you might find it difficult to rent out your residential units. Don’t assume that everything will remain static; look at the past history of the location and try to imagine any major changes that could be likely to take place in the future.

Professional Expertise:

Have the building inspected by a professional who has experience inspecting commercial buildings. Make sure the inspection covers every aspect; don’t settle for a standard inspection, which may not include trouble spots, such as a wet basement. Pay extra money if you have to for a thorough inspection that goes above and beyond what is required by mortgage lenders. If the inspection reveals serious flaws, don’t make an offer, or reduce your offer amount by the amount it would cost to make the necessary repairs.

Supporting Documentation:

Assemble the documents you will need for the loan application. Your real estate agent will be able to assist you in this. Most lenders require the following documents, but your lending institution may require more:

The ensuing is a list of supporting documents that are required to process and underwrite (due diligence) your commercial loan request. Additional documents will be required.

Financial Supporting Documents:

The last three (3) years corporate tax returns

The last three (3) years business tax returns

Name and address of corporate bank

Business Profit & Loss 3 Years, For Seller or Buyer

Most recent copy of business bank statement

Personal financial statement for all guarantors

Use of Proceeds In An Excel Format For Cash Out Refinance

Property Supporting Documents:

Schedule of tenants leases

Copies of Tenant Leases

Schedule of Units with Square Foot Per Unit

Schedule of improvements to be made with cost breakdown to subject property

Exterior Photos of Subject Property Photos of Parking Lot, Street view

Interior Photos of Subject Property

Most Recent Appraisal

Copy of the First Page of the Insurance Binder for Refinance

List of All Litigation Past and Present

Guarantor Supporting Documents:

4506 T executed

Tri merge credit report

Government issued photo ID copy – front and back

Personal Financial Statement

Articles of Incorporation

HUD FHA 223 Apartment Building Loans

HUD FHA 223 Apartment Building Loans

For those seeking multi-family properties, HUD Federal Housing Administration (FHA) loans provide an easier way to finance this purchase with fewer qualifications and increased flexibility.

HUD approved lenders are able to assume a greater level of risk and provide borrowers with the most aggressive rates and terms in the market.

HUD 223(f) apartment loans are available for the acquisition or refinancing of 5+ unit multifamily properties and are a great financing option for borrowers looking for maximum leverage and longer fixed rates and terms.

The program is available for market rate rental housing or for properties accepting rental assistance, either tenant based or project based a 30 day minimum lease term required.

There are no income or rent restrictions under Section 223(f) unless otherwise required by a project based HAP contract or other regulatory agreement. HUD FHA 223(f) insured mortgages are non-recourse with no market – economic or population – restrictions.

The property must meet a minimum three-year stabilization requirement, with complete kitchens and baths and have been completed or substantially rehabilitated prior to the date of the mortgage application.

The loan may include repair costs not to exceed 15% of its value after repairs or no more than $6,500 per unit, except in high cost areas. Repairs may not include replacing more than one major building system such as plumbing or electric.

Cash out Refinances are allowed when 80% of value exceeds existing debt plus transaction costs, but only 50% of the net cash will be released at closing.

HUD FHA 223 (f) Multifamily Financing Guidelines:

Loan sizes above $1 million – no maximum

83.3% LTV for market rate apartments

87% LTV for project based rental assistance

Up to 35 year fixed rate terms

1.17 minimum DSCR

HUD insured mortgages are non-recourse

5+ residential unit properties, including, detached, semidetached, row, walkup, or elevator-type rental or cooperative housing.

All 50 states including the US Territories of Puerto Rico, U.S. Virgin Islands, and Guam

With a core focus on flexibility, Winston Rowe & Associates really wants to be able to find a way to help everyone who comes to them find a funding solution that meets their needs.

The best funding solutions occur when they combine data with consultation and common sense.

That’s why Winston Rowe & Associates actually wants to speak with clients, so they can truly understand your business and its distinct needs.

You can contact them at 248-246-2243 or visit them online at http://www.winstonrowe.com

Freddie Mac Rental Income Calculations Changed

Winston Rowe & Associates

The changes are primarily aimed at determining the stability of that income, especially when it is short term and does not involve a lease.  The changes apply to loans with settlement dates on or after February 9, 2018.

Commercial loans used to purchase or refinance the subject property, or a non-subject property, which was not owned in the prior calendar year requires considering net rental income only up to a limit of 30 percent of the total of that net rental income plus all other stable monthly income used to qualify the borrower.

The exception would be a borrower who has a documented history of investment property management experience of at least one year.

The change is to provide support to sustainable and successful homeownership by requiring a reasonable limitation upon the reliance on a newer type of income stream.

To use rental income in refinancing a 1- to 4-unit investment property, a 2-to 4-unit primary residence, or a non-subject investment property, the following conditions must be met.

Short term rental income from a source where a lease is not utilized must have a two-year history documented on IRS Schedule E and the property must have been used for the purposes of producing rental income for that period of time.

Long term rental income can be verified through either a current signed and executed lease with an original term of one year or through income reported on Schedule E.

Sellers may also determine that rental income is stable without a lease when it is evident the income is not short-term, based on the documentation provided.

Changes to rental income requirements reflect changes in the rental market such as short-term rental income and are intended to support the determination of stability, calculation of rental income, and a reasonable expectation that rental income will continue.

The Freddie Mac Bulletin (#2017-12) also includes technical changes to rental income calculations, clarifications of some self-employed income revisions made last year.

This article was prepared by Winston Rowe & Associates.

They are publishers of Free eBooks and provide financing for a wide variety of commercial real estate

You can contact them at 248-246-2243 or visit them online at http://www.winstonrowe.com

Apartment Building Refinance, Rehab or Acquisition

Apartment Building Investing Business Metrics

Investing in apartments can be overwhelming.

Developing a financing proposal for a potential capital source, you’ll need to focus on the following.

Business Performance Metrics:

Net Operating Income (NOI)

Net Operating Income is the one metric that most investors use to analyze a property.  Unfortunately, it’s also the one metric that is the most manipulated by real estate agents to get someone to buy a property.

This is why it’s important for you to do your own math.  Here’s the formula for NOI:

Potential Rental Income

-Vacancy

Effective Rental Income

+Other Income
_____________

Gross Operating Income

-Operating Expenses
_____________
= Net Operating Income

Unlike other cash-flow metrics, NOI excludes financing and tax costs.  Therefore, investors are able to determine the cash-flow of a specific property.

Invest for the sake of cash flow, rather than making projections about potential appreciation (market or forced). As long as you follow that simple principle, you’ll be protected from a lot of risk.

Occupancy

The occupancy rate is the number of units filled divided by the total number of units.  For instance, if there are 95 units occupied out of a 100-unit apartment complex the occupancy rate is 95%.

Vacancy

Some investors prefer to use the vacancy rate instead of the occupancy rate. The vacancy factor is just the reciprocal of the vacancy. In the example above if there were 5 empty units out of a 100-unit apartment complex the vacancy factor would be 5%.

Absorption

This is an extremely important factor that you need to learn how to calculate – especially if you are investing in a growing market.  First, determine the total number of apartment units available in the market.

For this example let’s call it 3,000 with a 95% occupancy rate (2850 units rented).  Use a time-frame of 12 months.

Then find out how many units were built or demolished during this time frame.  For this example, let’s say a new apartment complex was built with 300 units so the market now is at 3,300 units with a 90% occupancy (2970 units rented).

In this example, even though the size of the market grew 10% to 3,300 units the absorption was extremely high because the total number of units rented actually increased.  Occupancy rate slipped slightly however, this is the sign of a healthy market.

Capital Expenditures (CapEx)

This is an easy metric to mess-up.  Basically, just think of capital expenditures as an expense.  However, capital expenditures improve the life of the asset.

A new roof would be an example of a capital expenditure.

Mowing the lawn would be an example of an expense.

A new roof improves the life of the asset you want to spread the cost of this new roof over the life of the asset.  For a roof, you would need to estimate the life of the roof.  Accountants call this “capitalizing the expense”

Reserves for Apartments

Reserves are a very big deal when investing in apartments.  When you forecast your return (especially your initial investment) you need to account for reserves.  Ok, what are actual reserves?  Well, there are multiple kinds of reserves such as:

Interest Reserves – That your lender might make you make. These payment reserves gives the lender a margin of safety knowing that there is always a certain amount of payments held in a reserve account, in-case you have some negative cash-flow for several months.

Cash Reserves – Investors, lenders, business partners or whoever else might be a stakeholder might want to require some cash reserves or liquidity reserves.  This simply ensures you will have the money to pay for any unforeseen expenses.

Maintenance Reserves – If you are buying an older property, maintenance reserves are absolutely essential. Instead of relying on cash-flow you will have properly reserved for any needed repairs and maintenance work.

With older properties, there is never a downside in having an excess maintenance reserve. You might lose out on some deals, but you will have an extra level of financial security.

Internal Rate of Return (IRR)

Of-course you want to measure your actual return for an investment. My favorite method is the IRR method. This extremely easy to do in excel:

Input initial investment

Forecast annual cash-flows

Forecast exit investment

Input total number of years

Loan-to-Value (LTV)

This metric is pretty simple; you simply take your loan balance divided by the value of the property. The vast majority of lenders have a loan to value maximum of 80%. One thing to note is that if there is a second mortgage that mortgage is sometimes lenders add that mortgage to their mortgage to get the total loan to value. The point of this ratio is to show that the investors have equity in the property.

Debt Service Coverage (DSC)

The formula for DSC is Net Operating Income divided by the total debt service.

Typically, lenders want to see at least a 1.10 DSC.  This means that for every $1.00 of debt service, the property is producing $1.10 of cash-flow to service that debt.

Capitalization Rates (Cap Rate)

When you hear of investors talking about a property for sale they normally talk about the cap rate the property is selling for.  The formula for cap rate is: Net Operating Income / Current Market Value

Even though this metric is simple, most real estate brokers manipulate this number (usually by using forecasted income numbers rather than the actual numbers).  Always take a stated cap-rate with a grain of salt and do your own math.

Apartment building financing is a Winston Rowe & Associates specialty.

Top Metro Markets to Rent to Millennials in 2015

Apartment Markets to Rent to Millennial’s

Investing in an apartment building can be a very profitable venture – if you find a building for the right price, with good potential cash flow and in a good investment location. If the location is not desirable, it won’t matter if you have the nicest building on the block or offer the most amenities for the lowest rents.

A couple of weeks ago RealtyTrac issued a report on the best markets for buying rental property in 2015 based on fair market rents for the year set by the U.S. Department of Housing and Urban Development and the most recent median home price data from RealtyTrac sales deed data.

The result was an interesting mix of counties at the top of the list: Baltimore City, Maryland (functions as a county) with a nearly 21 percent annual gross rental yield, followed by Richmond City, Virginia (also functions as a county) with a 20 percent annual gross rental yield.

Those two were followed by Philadelphia County, Wyandotte County, Kansas in the Kansas City metro area and Richmond County, Georgia in the Augusta metro area, all three of which had annual gross yields above 15 percent. Among these top five, the county with the biggest increase in millennials was Richmond City, Virginia, where the millennial population swelled 32 percent between 2007 and 2013.

50 Best Markets to Rent to Millennials

What, you may be wondering, about the traditional hipster hot spots like Washington, D.C., Brooklyn, San Francisco, Portland and Seattle? All of those did have significant increases in the millennial population between 2007 and 2013 ranging from an 82 percent increase in Arlington County, Virginia in the DC area to an 18 percent increase in Kings County, New York (Brooklyn). But the sky-high home prices in those markets means buying single family rentals in 2015 will not generate good rental returns.

Winston Rowe & Associates has strong relationships with a finite number of direct private capital, private equity, hedge funds, agency investors and regional and national commercial banks, each with a highly targeted commercial real estate financing practice.

When you call Winston Rowe & Associates, a principal is always available to speak with prospective clients. They can be contacted at 248-246-2243

They have no upfront fee apartment building financing in the following states.

Alabama, Alaska, Arizona, Arkansas, California, Colorado, Connecticut, Delaware, Florida, Georgia, Hawaii, Idaho, Illinois, Indiana, Iowa, Kansas, Kentucky, Louisiana, Maine,  Maryland, Massachusetts, Minnesota, Mississippi, Missouri, Montana, Nebraska, Nevada, New Hampshire, New Jersey, New Mexico, New York, North Carolina, North Dakota, Ohio, Oklahoma, Oregon, Pennsylvania, Rhode Island, South Carolina, South Dakota, Tennessee, Texas, Utah, Vermont, Virginia, Washington, Washington DC, West Virginia, Wisconsin, Wyoming

Market Update 2015 Apartment Financing Matrix

Winston Rowe and Associates

Apartment owners with a minimum of 5 units will find a wide array of financing options to meet their individual financing needs including assorted fix rate hybrid loans and prepayment options. Purchase refinance and cash out refinance are also available.

The need for alternative sources of capital in the apartment and multifamily real estate industry has never been greater.

Winston Rowe & Associates is a capital source that provides flexible, reliable and timely solutions for owners of commercial real estate nationwide.

No Upfront Fee Apartment Loan Highlights:

Loan Amounts:

$250,000 – $10,000,000

Term & Amortization:

Adjustable, 3, 5, 7, and 10 year hybrid loans amortized out for 30 years.

Prepayment Penalty:

Typically step-down prepayment penalties during the fixed rate portion of the loan.

Loan to Value Ratio:

Maximum LTV 75% depending on the quality and program.

Debt Coverage Ratio:

Minimum 1.25:1 DCR

 

Apartment Building Boom Is Hitting A Ceiling After Five Years Of Increases – Winston Rowe and Associates

Winston Rowe and Associates

Apartment construction across the country has more than tripled since 2009. Last year developers started more than 350,000 multifamily housing units nationwide.
Analysts say that apartment construction increases should dwindle in the next two years. And a slowdown in Texas’ economy could play a part.

“My forecast is for a leveling — not a lot more growth,” said Dave Crowe, chief economist for the National Association of Home Builders, which is holding its annual meeting this week in Las Vegas. “We are at the level that can be sustained by the demand.”

Apartments accounted for about a third of total U.S. home construction in 2014.

In North Texas, the share was even higher. At the end of the year, more than 30,000 apartments were being built in the Dallas-Fort Worth area compared with about 26,000 single-family home starts in the area in 2014.

D-FW ranks fourth nationally for total apartment building permits.
Crowe said apartment construction is peaking because of construction constraints and a shift by some renters into home buying.house construction blueprint

“We are starting to see some of the older millennials moving to homeownership,” he said.

During recent years in most major cities, apartments have captured a larger than normal share of new households.
“Whatever the job growth has been, all of the newly formed households have become renters,” Crowe said.

He said that as renter’s age, they are more inclined to think about homeownership.

“They have expressed that as their ultimate desire,” Crowe said. “As they sustain some stability in their incomes and jobs, they will buy.”

‘Where we need to be’

Multifamily home starts rose by 16 percent in 2014 to about 352,000 units, based in large part on the large renter demand.

“I’m not expecting a significant amount of growth in 2015,” Crowe said. “We are where we need to be.”

Dallas-based apartment analyst Ron Witten with Witten Advisors thinks that the current apartment building boom around the country has peaked.

“We expect rental apartment starts to slow down slightly late this year, maybe off 5 percent from 2014,” Witten said.

“Fundamentals are still solid, but rising costs are shrinking development returns, which will make some proposed projects uneconomic.”

MPF Research is forecasting a slight drop in apartment building, too.

“We are calling for a slight pullback of 5 percent to 10 percent,” said Greg Willett, vice president with the Carrollton-based apartment consultant. “That really reflects expectations for Texas.

“We’re calling for a big drop in activity in Houston and mildly smaller start figures across D-FW, Austin and San Antonio,” Willett said. “Since Texas accounts for about 20 percent of the nation’s building in this development cycle, it would take big increases in late-recovery spots like Atlanta, Phoenix, Riverside and Las Vegas to completely counter less activity in the Texas markets.”

Projects on hold

While the drop in Dallas apartment building has more to do with higher construction and land costs, in Houston the dramatic fall in oil prices and layoffs by energy firms are reducing development.

Houston-based apartment architect Sanford Steinberg said he’s already seeing the impact of the energy sector pullback.

“Projects are being put on hold,” Steinberg said. “They are not killing the project but putting them on hold.

“In the last few years we have been going crazy building multifamily housing, not just in Houston but all over the country,” he said. “We could use a little slowdown right now.”

Crowe said that while construction is leveling, he’s still watching to see that developers don’t get too far ahead of tenant leasing.

“I worry about the multifamily sector overbuilding,” he said. “It’s the one residential sector that has the greatest access to credit.

“There is a history of builders building more because they can get credit than because they can fill up the units.”

Source: AAOA

Maximizing Apartment Building Investments – Winston Rowe and Associates

Winston Rowe and Associates

Winston Rowe & Associates, a national no upfront fee commercial real estate financier has prepared this news article to present strategies for apartment building owners to maximizing their investment.

Real estate investors, especially those that invest in residential apartment buildings or entire complexes, have a wide range of products and services at their disposal to help ensure they keep their units filled and properly maintained.

As we all know, each time an apartment turns-over it costs money in order to prepare the apartment for the next resident. It must be cleaned, often updates may be necessary, such as replacing counter tops, appliances, carpeting and tiles.

The better resident you can place and the longer they stay the more money you save. One of the main ways to maintain residents is to provide a wide range of amenities and keep the property well maintained. Not just the interior, but the exterior and the surrounding grounds like fountains, playgrounds, pools, gym-facilities and dog areas.

There are several products and services that can help building management find the right residents. Other than screening and conducting the proper credit procedures, having a company in place to take care of the maintenance is another key area of importance.

Hiring the right property management firm can be instrumental in helping apartment building owners keep their properties attractive to the right kind of renters and maintain the property inside and out in order to maintain the integrity of the asset.

Many property management companies offer a wide range of products and services that will keep a property well-maintained. They can create a schedule of services to make sure that all units get seasonal maintenance several times a year.

Winston Rowe & Associate has commercial real estate financing solutions for apartment building investors in the ensuing states.

Alabama, Alaska, Arizona, Arkansas, California, Colorado, Connecticut, Delaware, Florida, Georgia, Hawaii, Idaho, Illinois, Indiana, Iowa, Kansas, Kentucky, Louisiana, Maine,  Maryland, Massachusetts, Michigan, Minnesota, Mississippi, Missouri, Montana, Nebraska, Nevada, New Hampshire, New Jersey, New Mexico, New York, North Carolina, North Dakota, Ohio, Oklahoma, Oregon, Pennsylvania, Rhode Island, South Carolina, South Dakota, Tennessee, Texas, Utah, Vermont, Virginia, Washington, Washington DC, West Virginia, Wisconsin, Wyoming

Apartment Fundamentals Still Strong

How to Get a Loan for an Apartment Building

Reis released its quarterly report on the U.S. apartment market on Tuesday, finding that the sector has cooled down somewhat recently. Vacancies, for instance, are at 4.2 percent as of Q4 2014, unchanged from the previous quarter and only down from 4.3 percent a year earlier. The apartment market isn’t remotely sluggish, but it isn’t the frenetic, ants-in-its-pants creature it became after the housing crash converted a lot of people into renters, or persuaded Gen Xers and Millennials that renting a few more years than their parents isn’t a bad thing.

In the longer run, even a breather such as this poses no threat to the market’s fundamentals. Reis senior economist Ryan Severino notes “demand had a surprising rebound during the fourth quarter to 45,027 units, the highest quarterly figure since the fourth quarter of 2013. This is an important point—even as construction increases in 2015 and beyond, demand will remain robust due to the large number of young renter in the US.” On the other hand, he says, even robust demand might not quite keep up with supply in future years, so “rising vacancy is likely to put downward pressure on NOI growth… even as rents continue to grow.”

And rents do continue to grow, Reis reports. In Q4 2014, asking rent was up 0.6 percent since Q3, and 3.5 percent since a year earlier. Likewise, effective rents were up 0.6 percent and 3.6 percent for the quarter and year, respectively. All in all, apartments are likely to remain a darling property type for landlords and investors for the foreseeable future.

Residential market: Not too hot, not too cold?

CoreLogic reported its latest Home Price Index on Tuesday, and it’s another in a litany of reports about the housing market that confirm a steady appreciation in prices, rather than the kind of huffing-and-puffing the U.S. experienced as the bubble heated up in the early to mid-2000s. The year-over-year increase in prices was 5.5 percent in November 2014, and barely anything month-over-month: 0.1 percent. Only a year ago, the annual appreciation was about twice as much.

There’s no way to know exactly how much appreciation is enough to keep the housing market on an even keel, but it’s clear that too much is bad (bubbles always pop) and not enough is also bad, since buyers lose confidence in a market that isn’t appreciating. That slows demand down which, in turn, depresses price appreciation further—a vicious cycle. As a main pillar of the American economy, and one that affects every kind of real estate, no one wants either an over- or under-heated residential market.

CoreLogic’s report is also important because it’s been showing for the last two years or so that the toxic effect of foreclosed housing (toxic, at least as far as residential prices goes, besides the human cost) isn’t nearly as pronounced as it was during the worst of the Great Recession. Excluding distressed sales in November 2014, home prices increased 5.3 percent from November 2013 and were up 0.3 percent from the prior month: not a huge difference.

The report also shows that some markets have recovered better than others. Including distressed sales, Michigan led the country with a 9 percent price increase from November 2013, followed by Colorado with an 8.8 percent increase. Excluding distressed sales, Massachusetts (up 8.6 percent) and Texas (up 7.9 percent) showed the largest increases.

CMBS delinquencies edge down

Trepp reported on Tuesday that the delinquency rate for US commercial real estate loans in CMBS is now 5.75 percent, down from 7.43 percent in December 2013, and its lowest level in five years. Over $700 million in loans were cured in December, which helped push delinquencies down by 14 basis points for the month. Among the major property types, the lodging sector saw the biggest year-over-year improvement, falling 314 basis points during 2014.

Wall Street took another tumble on Tuesday: a correction after an inflated 2014? Worries that the price of oil is going too low? In any case, the Dow Jones Industrial Average lost 130.01 points, or 0.74 percent, while the S&P 500 declined 0.89 percent and the Nasdaq was off 1.29 percent.

This article original appeared on MSNonline.com

National Apartment Loan Rates Winston Rowe & Associates

National Apartment Loan Rates

Winston Rowe & Associates is a no upfront fee commercial real estate capital source offering a wide variety of financing options for multifamily financing nationwide.

They have access to various financial institutions’ wholesale programs; offering clients the most competitive interest rates with no up-front fees and reduced financing costs.

Apartment owners with a minimum of 5 units will find a wide array of financing options to meet their individual financing needs including assorted fix rate hybrid loans and prepayment options.

Purchase refinance and cash out refinance are also available.

Eligible Properties:

Stabilized properties with at least 5 units in major MSA’s and proven management.

Up to 40% commercial component permitted; student and senior housing eligible for financing.

Loan Amounts:

$250,000 – $10,000,000

Term & Amortization:

Adjustable, 3, 5, 7, and 10 year hybrid loans amortized out for 30 years.

Prepayment Penalty:

Typically step-down prepayment penalties during the fixed rate portion of the loan.

Loan to Value Ratio:

Maximum LTV 75% depending on the quality and program.

Debt Coverage Ratio:

Minimum 1.25:1 DCR

Credit Score:

Minimum middle credit score 680

The goal at Winston Rowe & Associates is to add value to client’s acquisition or refinance by offering a wide range of financing solutions and direct access to top national, regional, and local retail banks, hedge funds and private capital lenders.

They can be contacted at 248-246-2243 or check them out online at

Winston Rowe & Associates provides Apartment Building financing in the ensuing states.

Alabama, Alaska, Arizona, Arkansas, California, Colorado, Connecticut, Delaware, Florida, Georgia, Hawaii, Idaho, Illinois, Indiana, Iowa, Kansas, Kentucky, Louisiana, Maine,  Maryland, Massachusetts, Minnesota, Mississippi, Missouri, Montana, Nebraska, Nevada, New Hampshire, New Jersey, New Mexico, New York, North Carolina, North Dakota, Ohio, Oklahoma, Oregon, Pennsylvania, Rhode Island, South Carolina, South Dakota, Tennessee, Texas, Utah, Vermont, Virginia, Washington, Washington DC, West Virginia, Wisconsin, Wyoming

National Apartment Loan Rates No Upfront Fees

Multifamily Best Loan Rates

Winston Rowe & Associates is a no upfront fee commercial real estate capital source offering a wide variety of financing options for multifamily financing nationwide. Not only can they save you time by searching hundreds of loan programs for you, but they can also save you money. Winston Rowe & Associates has access to various financial institutions’ wholesale programs, they can offer you the most competitive interest rates with no up-front fees and reduced financing costs.

Apartment owners with a minimum of 5 units will find a wide array of financing options to meet their individual financing needs including assorted fix rate hybrid loans and prepayment options. Purchase refinance and cash out refinance are also available.

Eligible Properties:

Stabilized properties with at least 5 units in major MSA’s and proven management.
Up to 40% commercial component permitted; student and senior housing eligible for financing.

Loan Amounts:

$250,000 – $10,000,000

Term & Amortization:

Adjustable, 3, 5, 7, and 10 year hybrid loans amortized out for 30 years.

Prepayment Penalty:

Typically step-down prepayment penalties during the fixed rate portion of the loan.

Loan to Value Ratio:

Maximum LTV 75% depending on the quality and program.

Debt Coverage Ratio:

Minimum 1.25:1 DCR

Credit Score:

Minimum middle credit score 680

The goal at Winston Rowe & Associates is to add value to client’s acquisition or refinance by offering a wide range of financing solutions and direct access to top national, regional, and local retail banks, hedge funds and private capital lenders.

 

Hard Money For Apartment Buildings No Upfront Fees

Apartment Financing Best Interest Rates

Trying to find an apartment building loan can be a challenging and time consuming and expensive process to go through on your own.

A hard money loan through Winston Rowe & Associates affords you the opportunity to access the funds necessary to take the next step as an Apartment Building owner.

Whether you need a loan to purchase or refinance a multi-unit apartment building, a mixed-use development, or any kind of commercial project, Winston Rowe & Associates is there for you.

Apartment Building Financing Nationwide:

Quick turn-around times

No upfront or advance fees

All credit histories accepted

Loans ranging from $500,000 up to $5,000,000

Loan-to-value (LTV) up to 65%

1-3 year terms, interest-only

Purchase, refinance and cash out

Flexible underwriting

With the need for alternative sources of capital in the apartment and multifamily market has never been greater.

Winston Rowe & Associates is a capital source that provides flexible, reliable and timely solutions for owners of commercial real estate nationwide.

They quickly analyze and asses prospective clients transactions and provide immediate feedback within 24 hours.

Winston Rowe & Associates provides no upfront or advance fee commercial Apartment Building financing in the following states.

Alabama, Alaska, Arizona, Arkansas, California, Colorado, Connecticut, Delaware, Florida, Georgia, Hawaii, Idaho, Illinois, Indiana, Iowa, Kansas, Kentucky, Louisiana, Maine,  Maryland, Massachusetts, Minnesota, Mississippi, Missouri, Montana, Nebraska, Nevada, New Hampshire, New Jersey, New Mexico, New York, North Carolina, North Dakota, Ohio, Oklahoma, Oregon, Pennsylvania, Rhode Island, South Carolina, South Dakota, Tennessee, Texas, Utah, Vermont, Virginia, Washington, Washington DC, West Virginia, Wisconsin, Wyoming

Why Invest In Apartment Buildings

Small Apartment Building Loans

Whether you’re buying a single apartment to rent out or a building full of them, you can reap many of the same benefits. You also get the same two key drawbacks — dealing with tenants and owning an investment where your money is locked up and usually not able to be accessed quickly. Ultimately, though, most apartment investors feel that the benefits of owning multi-family property make it an excellent wealth-building vehicle.

Healthy Investment Returns

Even relatively conservative and low-yielding apartments offer healthy returns relative to other asset classes. Many investors are attracted to the cash flow, which, depending on how you buy your apartment, can be anywhere from a few percent to the mid-teens per year, calculated relative to your down payment. However, you’re also paying your loan down, and this adds to the return you’ll realize either when you sell the building and cash in your equity or when you pay the loan off and get an immediate increase in monthly income. While principal reduction may not seem like a major contributor to your return, bear in mind that your mortgage increases its impact, since the growth is relative to your down payment.

Operational Simplicity

Compared with other types of investment real estate, apartments are relatively simple to operate. Your responsibilities are clearly defined, and your tenant relationships are straightforward. This is a significant difference from leased investments such as offices and retail centers where finding tenants can be time-consuming and expensive and the nature of each tenancy can be very different.

Tax Benefits

Like other forms of investment real estate, you can write off all of your expenses with essentially no limit to reduce your taxable income. If you use the proceeds from selling your apartment to buy more investment real estate, you can also defer your capital gains and recapture taxes. You can also depreciate your apartment and write off a portion of its value every year, further reducing your tax liability. Unlike commercial real estate that has a 39-year life, apartments get depreciated over 27.5 years, giving you a larger write-off every year than with other property types.

Owning Apartment’s 

Owning apartments isn’t like having money in the bank. You can’t go to your apartment building and pull your money out whenever you want. Taking out equity through a cash-out refinance can take months and cost thousands of dollars in loan fees. Selling also takes months and could generate many thousands of dollars of commission costs. As such, if you aren’t sure that you want your money to stay invested, apartments might not be a good choice.

Tenants

For many owners, the biggest problem with owning apartments is dealing with tenants. While some tenants are easy to manage, others aren’t. If you don’t have a property manager, you will have to meet prospective tenants to show them units and take calls from existing tenants when something in their unit breaks. Hiring a management company can mitigate some of these problems, but their charges will cut into your profits. In addition, while a management company can cut down on the headache of dealing with tenants, it can’t insulate you from the financial challenges of building repairs, unpaid rent and tenant turnovers.

Commercial Real Estate Loans – No Upfront Fees From Winston Rowe & Associates

Apartment Building Mortgage

Winston Rowe & Associates, a no upfront fee commercial real estate financier is offering some of the most competitive commercial real estate loans for the Detroit Metropolitan Market to meet the needs of its clients.

Winston Rowe & Associates is a capital source that provides flexible, reliable and timely solutions for owners of commercial real estate nationwide.

They quickly analyze and asses prospective clients transactions and provide immediate feedback within 24 hours.

Full Spectrum of Commercial Real Estate:

No Upfront or Advance Fees

All Commercial Property Types Considered

Single Family Portfolio Loans

Loan Amounts Starting at $500,000 with No Upper Limit

Purchase, Refinance and Cash Out

Conventional and Fast Hard Money Loans

 

 

10 Rental Markets Where Landlords Make A Killing

Private Money Lending

Stocks aren’t the only asset class with impressive returns. With the help of low homeownership rates and strong mobility demand, the rental market remains attractive for investors, especially in areas of the country experiencing double-digit returns.

According to a new report from RealtyTrac, a leading source for comprehensive housing data, rental property in the United States posted an average annual return of 9.06% in the third quarter. That is down slightly from 9.65% in the same year-ago quarter, but still represents a significant return for landlords.

Furthermore, median home prices rose more than 7% on average from a year earlier. The report analyzed median sales prices for residential properties and average fair market rents for three bedroom properties.

“The single family rental market is still strong, with returns averaging 9% in the 586 counties analyzed,” said Daren Blomquist, vice president at RealtyTrac, in a press statement. “Even so, the market is softening, with those same 586 counties averaging a nearly 10% return a year ago. In the high-risk, high-yield markets, where unemployment and vacancy rates are higher than national averages, the average return was a whopping 19%, actually up from a year ago thanks to a strong increase in rental rates.”

Let’s take a look at the top 10 rental markets where landlords are making a killing, using annual gross rental yields from RealtyTrac.

10. Hernando County, Florida

• Annual gross rental yield: 17.29%

• Vacancy Rate: 5.1%

9. Pasco County, Florida

• Annual gross rental yield: 17.30%

• Vacancy Rate: 8.9%

8. Columbia County, Florida

• Annual gross rental yield: 18.42%

• Vacancy Rate: 11.3%

7. Wayne County, Michigan

• Annual gross rental yield: 19.88%

• Vacancy Rate: 8.9%

6. Spalding County, Georgia

• Annual gross rental yield: 20.35%

• Vacancy Rate: 12.3%

5. Putnam County, Florida

• Annual gross rental yield: 22.63%

• Vacancy Rate: 6.3%

4. Howard County, Indiana

• Annual gross rental yield: 24%

• Vacancy Rate: 6.6%

3. Duplin County, North Carolina

• Annual gross rental yield: 24.4%

• Vacancy Rate: 8.8%

2. Clayton County, Georgia

• Annual gross rental yield: 26.88%

• Vacancy Rate: 16.9%

1. Edgecombe County, North Carolina

• Annual gross rental yield: 41.57%

• Vacancy Rate: 11.1%

Source: USA Today

Renters Face Affordability Crisis – Winston Rowe & Associates

Multifamily Loans

Winston Rowe and Associates, a nationwide no advance fee commercial real estate financier has prepared this analysis of the challenges to obtain affordable housing in the current rental markets.

With increased competition for units, rents are shooting up, and the increases are biting renters’ wallets as they find themselves increasingly getting priced out of the market, with wages failing to keep pace.

Nationwide rents have risen about 6 percent from a year ago, due to rising demand and still-limited supply, CNBC reports. Renters in San Francisco, San Diego, Boston, Baltimore, Washington, D.C., and Chicago are paying more than 30 percent of their wages on a two-bedroom rental, according to an analysis by Trulia. Financial experts often recommend spending no more than 30 percent of wages on housing expenses.

Rental demand is strong and likely will remain so for the foreseeable future, analysts note. Apartment vacancies rose slightly in the third quarter for the first time in four-and-a-half years, but was mostly attributed to more rental supply coming on the market, according to Reis analytics firm.

Winston Rowe & Associates has some of the most aggressive rates and terms available, while managing every step of the financing process from document collection to commitment negotiation and closing.

They have national solutions for conforming and non-conforming commercial loan refinance programs, each designed to provide the most competitive financing terms based on a combination of property constraints, borrower investment and personal objectives.

When you call Winston Rowe & Associates, a principal is always available to speak with prospective clients. They can be contacted at 248-246-2243 or visit them online at http://www.winstonrowe.com

 

North Dakota Apartment Loans No Upfront Fees

WINSTON ROWE AND ASSOCIATES

 

Many commercial real estate investors in North Dakota have been dismayed when they are rejected by traditional banks when they apply for commercial real estate financing.

Somehow traditional bankers see the North Dakota Oil Boom as a onetime temporary thing and down the road no one will be using oil in the future.

Savvy commercial real estate investors searching for apartment financing in North Dakota are turning to Winston Rowe & Associates, a North Dakota apartment lending intermediary, for multifamily properties with 5 or more units.

They offer clients a full spectrum of apartment building loan options to help customize a product to meet each individual investor’s apartment financing needs.

All of Winston Rowe & Associates apartment building financing solutions are offered at competitive rates, so owners and investors can spend less on interest and fees and turn an even bigger profit from their investment in an apartment building or complex.

There are flexible loan terms and payment schedules available to fit the needs of any owner or investor, whether the funding is used on the purchase of an existing building, the construction of a new building, or the renovation of an existing structure. Refinancing loans are available to save current owners money on their mortgage loan payments.

North Dakota Apartment Building Lending Highlights:

No Upfront or Advance Fees

Loans Starting at $500,000. to $100,000,000.

Hard Money for a Fast Close

Super Competitive Hard Money and Conventional Rates

The goal at Winston Rowe & Associates is to add value to client’s acquisition or refinance by offering a wide range of financing solutions and direct access to top national, regional, and local retail banks, hedge funds and private capital lenders.

When you call Winston Rowe & Associates, a principal is always available to speak with prospective clients. They can be contacted at 248-246-2243 or visit them online at http://www.winstonrowe.com

California Quick Close Commercial Loans No upfront Fees

Real Estate Investing

Trying to find bridge financing for your multifamily or non-owner occupied SFR or other property types is challenging in today’s banking climate. Winston Rowe & Associates is there to help.

Commercial real estate investors have been turning to Winston Rowe & Associates.

They are a national commercial real estate financier without the usual up front or advance fees.

The ensuing is the bridge loan funding overview

No upfront fees

Quick close

12 – 36 month duration with no loan pre-payment penalties

$250,000 – $25,000,000 in loan value

Target 50-65% LTV

Cash flowing assets preferred

1st mortgage with personal recourse focused

All product type (Non-owner occupied SFR, Multi-Family, Office and Retail preferred)

When speed and experience are important and crucial to your commercial hard money investing success, a principal at Winston Rowe & Associates is always available to speak with prospective clients. They can be contacted at 248-246-2243 or visit them online at http://www.winstonrowe.com

Winston Rowe & Associates provides no upfront or advance fee due diligence and advisory services in the following states.

Alabama, Alaska, Arizona, Arkansas, California, Colorado, Connecticut, Delaware, Florida, Georgia, Hawaii, Idaho, Illinois, Indiana, Iowa, Kansas, Kentucky, Louisiana, Maine,  Maryland, Massachusetts, Michigan, Minnesota, Mississippi, Missouri, Montana, Nebraska, Nevada, New Hampshire, New Jersey, New Mexico, New York, North Carolina, North Dakota, Ohio, Oklahoma, Oregon, Pennsylvania, Rhode Island, South Carolina, South Dakota, Tennessee,   Texas, Utah, Vermont, Virginia,   Washington, Washington DC, West Virginia, Wisconsin, Wyoming

How To Invest In Apartment Buildings

APARTMENT INVESTING LOANS NATIONWIDE ONLINE

Winston Rowe & Associates has prepared this article to provide prospective clients with a strategic overview of the mechanics of investing in multifamily and apartment buildings. Winston Rowe & Associates is a national commercial real estate finance firm specializing in no advance fee loans.

For more information about apartment building investing you can go to http://www.winstonrowe.com or contact Winston Rowe & Associates directly at 248-246-2243.

Overview:

Rental property that has more than one family unit is considered multifamily property. From a duplex (two units), the smallest multifamily property, up from there to larger rental complexes easily consisting of hundreds of apartments.

The advantage of purchasing multifamily properties, not unlike all income property, is that it provides real estate investors with the ability to support debt from the income the property produces.

Understood in real estate investing circles as “using other people’s money”, this idea is crucial to buying multifamily properties profitably and therefore must always be kept in mind because the success or failure of the investment depends on the income the property generates to meet debt service and other obligations required to keep the property.

Enough said. Let’s look at three elements that contribute to this principal, and discuss why they are crucial to buying multifamily units profitably.

Obtaining Financing:

The key to buying any investment property is for you to establish a sound financing package. You want to obtain a loan that doesn’t place excessive burdens on the property, or yourself. Also, given that lenders evaluate multifamily real estate based on income stream and generally structure a loan based on the property’s financial strength as well as the investor’s, bear in mind the significant role the principal of using other people’s money plays in financing the investment.

When applying for a loan on a multifamily apartment, present lenders with clear and concise cash flow reports because you are more apt to obtain a favorable financing package when the property is represented fairly to the lender and the income and operating expenses are shown to be accurate.

Research & Market Analysis:

What tenants are willing to pay to occupy a unit in the apartment is the cornerstone of the investment. Therefore, it’s incumbent upon real estate investors to understand local rental market trends for vacancies and rental rates when buying multifamily real estate property. Rental market trends are easy for investors to recognize, just watch the newspaper or drive around the community noting all rental properties that have vacancies. If you see few for rent ads or signs, or surmise that rents are increasing, it probably signals a shortage of rental units, and a favorable opportunity for you. On the other hand, when lots of rental signs start appearing and rents drop, it could spell trouble for multifamily real estate.

If you’re looking for real estate properties for commercial investing or need background information on an asset? The following link will take you directly to Winston Rowe & Associates Free commercial real estate and investing resources:

http://www.winstonrowe.com/Free_Real_Estate_Resources.html

The best time to own multifamily property, naturally, is when vacancy rates decrease and tenants are standing in line to rent an apartment. Apartment property owners can be more selective about the type of tenant they rent to and establish a positive direction for the complex, perhaps even increasing rents.

On the other hand, when tenants become scarce, owners might have to become less selective about tenants and perhaps lower the rents just to fill the units.Be sure not to neglect a rental market survey whenever you purchase multifamily property. It’s always crucial to gauge the rents and vacancy rates.

Economic Conversion:

There might be money to be made in cases where the former property owners have let the property run down and rents had to be decreased to keep the units filled.

If these rental properties are in a good area of town or in an area that is returning to a former higher quality, then the remodeling of a rundown apartment complex can be a profitable venture. Just make sure that you ascertain the cost for remodeling and understand what impact it will have on your income stream.

Pure window dressing for the sake of appearances only, unless it has a positive influence on occupancy levels or rents, is typically avoided by prudent real estate investors. So get a qualified contractor to give you a bid on remodeling. Otherwise, what you surmised as surface issues when you were buying the multifamily units could in fact be a costly can of worms.

In other words, look for an opportunity to upgrade the building and raise rents because it can contribute to a profit, just be sure that you know exactly what you’re getting into.

Pros & Cons of Buying Multifamily Property:

The most obvious advantage of buying any income property is real estate investors can grow wealthy in the long run. Holding on to investment property and simply letting other people’s money payoff the debt, even if there is no immediate cash flow, is what drives people into real estate investing.

Moreover, because multifamily properties serve a basic need in that they provide shelters to those who cannot afford or who do not choose to buy real estate, the downside risk to multifamily investing is limited.

The downside to owning rental property mostly concerns the management problems associated in dealing with tenants. Multifamily properties can be management intensive, and often the reason why investors who purchase rental property hire the services of a professional property management company to deal with the day-to-day issues of running the property. So you can choose to minimize this disadvantage if you care to.

The bottom line is straightforward. Multifamily property provides investors the opportunity to build wealth. Nonetheless, it’s similar to investing in any other type of investment property, whether it’s land or commercial real estate or apartments, it simply requires you to do it correctly, and with a careful eye on the elements discussed here. Here’s to you and your real estate investing success

Winston Rowe & Associates success is measured by their clients’ success, and their mission is to be your source for the most appropriate – and advantageous – apartment building financing solution that helps client achieve their goals.

Winston Rowe & Associates has no upfront free apartment building loans in the following states.

Alabama, Alaska, Arizona, Arkansas, California, Colorado, Connecticut, Delaware, Florida, Georgia, Hawaii, Idaho, Illinois, Indiana, Iowa, Kansas, Kentucky, Louisiana, Maine,  Maryland, Massachusetts, Minnesota, Mississippi, Missouri, Montana, Nebraska, Nevada, New Hampshire, New Jersey, New Mexico, New York, North Carolina, North Dakota, Ohio, Oklahoma, Oregon, Pennsylvania, Rhode Island, South Carolina, South Dakota, Tennessee,   Texas, Utah, Vermont, Virginia,   Washington, Washington DC, West Virginia, Wisconsin, Wyoming

Aggressive National Apartment Building Financing

APARTMENT BUILDING LENDERS WITH NO ADVANCE FEES NATIONWIDE

Apartment Loan programs from Winston Rowe & Associates encompasses all aspects of multifamily apartment financing.  Whether you are refinancing a stabilized apartment building or acquiring & developing a new apartment complex, their aggressive apartment loans have helped investors across the country achieve their apartment financing goals with larger apartment loans, lower DCRs and faster closings.

Prospective clients with questions concerning their apartment building transactional funding programs can contact Winston Rowe & Associates at 248-246-2243 or visit them on line at http://www.winstonrowe.com

Winston Rowe & Associates structures apartment and multifamily financing solutions utilizing a broad spectrum of traditional and non-traditional capital sources.

They are not tied down by whatever the flavor of the moment is on Wall Street, and can get deals financed which the CMBS world can’t or won’t do, especially in the current structured finance market.

Their primary goal is to be your source for the financing of apartment loans, without up front or advance fees. Winston Rowe & Associates has creative solutions for commercial real estate investors across the nation.

Prospective clients that need to refinance an existing property or you need purchase money – they can help structure the terms that most suitably meets your needs.

Apartment Building Financing Features Available:

No Upfront or Advance Fees
Loan Amount From $2,000,000.
Transaction Funded In 30 Days With Complete Submission
As low as 1.10 DSCR available in some cases
No Lockout & No Prepayment Options Available
Interest Only Option
ARM Programs Available
Non-Recourse Loans Available
Low Fixed Rates ranging on 5-10 Year loans with 30 Year amortized terms.
Conduit Fixed-Rate and Floating-Rate Loans
Fannie Mae and Freddie Mac Loans
Market Rents as NOI

Winston Rowe & Associates understands that in this business very few funding requests will fit neatly in a box and therefore they always look forward to working with clients to identify a unique deal structure that can benefit from their apartment building transactional financing programs.

They also have an excellent knowledge based free investor resource for commercial real estate investing, valuation and analysis located at:

http://www.winstonrowe.com/Free_Real_Estate_Resources.html

 

 

 

Investing In Apartment Complexes Financing Options – Winston Rowe & Associates

COMMERCIAL REAL ESTATE FINANCING ONLINE WITH NO UPFRONT FEES

Investing In Apartment Complexes Financing Options
Apartment building are a great way to build wealth because they always increase in value or are a great hedge on inflation. Winston Rowe and associates is a nationwide no upfront fee commercial finance firm. You can contact them at 248-246-2243

Financing for Apartment Complexes

Winston Rowe and Associates, a no upfront fee commercial real estate financier. They‘ve developed a comprehensive mix of highly customized multifamily and apartment building loan programs.

When it comes to investing in multifamily housing properties, often times the difference between a good investment and a great investment is financing.

For more information about Winston Rowe and Associates you can contact them at 248-246-2243 or check them out on line at HTTP://WWW.WINSTONROWE.COM

Apartment Financing Options:

Joint Venture Purchase and Construction

Capital deployment starting at $10 mm
Liquidity requirement at 10%, in addition to a 10% reserve

Conventional Purchase, Refinance and Cash Out

Nationwide
75% LTV purchase
60% LTV Refinance
Minimum capital deployment $1 MM

Hard Money and Private Capital Purchase, Refinance and Cash Out

65% maximum loan to value
Minimum capital deployment $500,000

Chapter 11 Debtor in Possession Financing

50% maximum Loan to Value
Minimum capital deployment $1 mm

Discount Note Financing

Maximum Loan to Value 60%
NO new cash required
Minimum capital deployment $1 mm

The goal at Winston Rowe & Associates is to add value to client’s acquisition or refinance by offering a wide range of financing solutions and direct access to top national, regional, and local retail banks, hedge funds and private capital lenders.

Winston Rowe & Associates provides no upfront or advance fee commercial Apartment Building financing in the following states.

Alabama, Alaska, Arizona, Arkansas, California, Colorado, Connecticut, Delaware, Florida, Georgia, Hawaii, Idaho, Illinois, Indiana, Iowa, Kansas, Kentucky, Louisiana, Maine, Maryland, Massachusetts, Michigan, Minnesota, Mississippi, Missouri, Montana, Nebraska, Nevada, New Hampshire, New Jersey, New Mexico, New York, North Carolina, North Dakota, Ohio, Oklahoma, Oregon, Pennsylvania, Rhode Island, South Carolina, South Dakota, Tennessee, Texas, Utah, Vermont, Virginia, Washington, Washington DC, West Virginia, Wisconsin, Wyoming

How To Retire Early Investing In Apartment Buildings

MULTIFAMILY LENDERS WITH NO ADVANCE FEES

We all work hard at our J.O.B., don’t we? We work hard each day and hope to retire when were 65, that’s the American dream, right?

Many of us are looking for something better, maybe a scenario where we can retire earlier or perhaps enter a state of semi-retirement. The answer: investing in apartment buildings.

Imagine working really hard to find a good building at a fair price, putting the financing together, and hiring a property manager to run the whole thing. Was that a lot of work? Of course. But don’t you work hard anyway? Here’s the difference….

Apartment Ownership – What’s It Really Like?

Imagine the day you close on the building and your property manager takes over. Ask most apartment building owners, and they will say they spend anywhere between 2 and 5 hours per week on their building if its managed by a professional management company.

What have you done? You went from a job that took 40-50 hours of your time each week to one that takes a fraction of that. And you replaced part or all of the income of your job with that from the apartment building.

You’re working less while maintaining your income.

What would this mean to you? Maybe you could spend more time with your family. Maybe you want to travel more. Pursue a hobby. Give back. Or maybe do more de”als.

How is something like this possible with apartment buildings? The answer is in how apartment buildings are valued.

How Do you Make Money On Apartment Investments?

The value of an apartment building is driven by its net operating income, the amount of income left after all expenses are paid. The more money the building spits out after all expenses, the more its worth.

In many parts of the country, a building is worth 10 times its net operating income. This 10 times multiplier is referred to as the capitalization or cap rate for short. Don’t worry about this for now – its not important to the point I’m trying to make. Lets just use a cap rate of 10 for our discussion.

Lets say a building has a net operating income of $100,000, which would make it worth $1M. If you could somehow make the building generate $10,000 more each year, maybe by increasing rents or decreasing expenses, you would have generated $100,000 in value (a cap rate of 10 times the additional income of $10,000 is an additional $100,000 in value).

Lets look at a more specific example, so that you can start visualizing how this math could work for you in real life.

Assume you bought a 10-unit building for $540,000, and you had to put 30% down. The building was bought at a 10-cap based on our formula we’ve used so far. Which means its net operating income (or NOI) is $54,000 per year, times our cap rate of 10 is $540,000. The income per unit is $1,000, and the expenses are 55% of the income. The building is in great shape and has been managed by the owner himself.

So far there is nothing special about this deal.

However, suppose you found out that the average market rent in the area is actually a $200 higher per month. Suppose further that you meet a property manager who manages two similar buildings in the area, and he tells you that his expenses are only 45% of income.

Lets say it takes us 3 years to get the building to where it should be, i.e. with each unit bringing in $1,200 per month and lowering our expenses to 45% of income. Here’s how this would impact our financials:

By making small improvements each year, we have added $25,000 to our Net Operating Income. What is our value now?

Our new NOI is $79,000, so our value now is about $790,000 ! That is an increase of $250,000 in three years! Isn’t that incredible?

But that’s not all.

You also had between $2,600 and $4,700 in monthly income from this building over those three years.

 

Apartment Market Has Strongest Quarter Since 2000

NO UPFRONT FEE COMMERCIAL APARTMENT LENDERS

The second quarter of 2014 has emerged as the strongest quarter for the U.S. apartment market in nearly 14 years, according to early release figures from Axiometrics, the leading supplier of apartment data and research.

Effective rent growth was 2.4% on a quarterly basis nationwide in April-June 2014, the highest quarter-to-quarter rate since the 2.9% of July-September 2000. Occupancy in the second quarter of 2014 was 95.0%, the strongest since the first quarter of 2001 (95.6%).

Both rent growth and occupancy exceeded expectations.

“The year started slowly for the apartment market, perhaps due to weather, but it experienced a major reacceleration during the second quarter,” Axiometrics Vice President of Research Jay Denton said, referring to the major winter storms and bitter cold temperatures that gripped much of the nation during the early part of the year. “Effective rent growth was soft in January and February, but the period from March through May was the one of the strongest three-month stretches we’ve seen in the 19 years we’ve been tracking apartments.”

Another reason for the strong apartment performance just may be the falling home-ownership rate, Denton added. U.S. Census Bureau statistics show that the home-ownership rate in the first quarter of 2014 was 64.8%, the lowest in 19 years – since the second quarter of 1995, when the rate was 64.7%.

“Demographics, along with the increasing choice to rent rather than own, continue to play in the favor of apartments,” Denton said.

The second-quarter effective rent growth was a big improvement from the first-quarter quarter’s 0.5%, an increase from the -0.9% recorded in the fourth quarter of 2013, measured on a quarter-over-quarter basis. Occupancy was up 60 basis points from the first quarter’s 94.4%, ending a two-quarter streak of decline.

Annualized effective rent growth was 3.3% in the April-June 2014 time frame, up from 2.9% in the January-March period. That matches the second-quarter 2013 rate and marks the second straight quarter in which the annualized effective rent growth has increased.

These increases are taking place with 180,000 new units having been delivered in the past year.

“There is more supply on the way, but the apartment market is merely returning to a more ‘normal’ level of construction,” Denton said. “It is important to note that total residential construction, including single-family homes, is still well below the historical norm. This prolonged period of lower-than-normal residential construction has allowed apartment occupancy rates to surge to a level not achieved since 2001.”

The second-quarter strength is further confirmation that, as Axiometrics has reported previously, the rental base is changing, Denton added. Most of the new units are geared toward higher-income individuals.

Most of these high-rent submarkets are in the urban core, where many millennials and others like to live to be closer to their work and play. Also, many in this age cohort group like the flexibility of renting versus owning, while others might be falling victim to stringent mortgage-lending requirements.

But, Denton said, the renters outside the core are staying put, and they, too, might not quite make the mortgage-qualification standards because of credit and/or income issues.

National Summer Months Crime Spike Property Protection Tips

NATIONAL APARTMENT BUILDING LENDERS NO UPFRONT FEES

 

Winston Rowe & Associates, a national no upfront fee apartment building financing firm developed this article to provide security tips for protecting your apartment building and apartments during the summer crime months spike.
With both the high mercury and summer vacations in full swing, incidents of crime increase, too. And it’s no coincidence.

According to FBI data, property crimes such as burglary, property theft and motor vehicle theft have risen as much as 9 percent between May and September over the past five years – the highest percentage in the calendar year.

Inside Your Residence:

Make sure dead-bolt locks are installed on all outside doors. They should not require a key from inside so that they’re easy to unlock if you need to get out quickly in case of a fire or other emergency.

Install peepholes on your outside doors so you don’t have to open them to see who’s on the other side. If your outside door has window panels on the side, cover them with blinds or curtains to keep out unwanted eyes.

Keep your blinds or curtains closed when you’re not home, especially on your main or ground-level floor.

If you have a sliding glass door, consider adding a defense other than the standard lock, such as blocking the track or installing a protective film that prevents the glass door from being smashed in.

Outside Your Residence:

Trim bushes and maintain landscaping to avoid creating unwanted hiding places for would-be intruders.

The exterior of your property should be well lit. Consider installing motion detector lights.
Be on the lookout for graffiti tags and vandalism, and fix it as soon as it happens by replacing signs, painting over it or making repairs as necessary.

Where You Park:

Always lock your vehicle, roll up widows and keep valuables out of sight, no matter where you park. This includes everything from high-dollar items, such as your cell phone or laptop, down to the change in your cup holder.
In any parking lot, park under a light, if possible.

If you have a garage door, always close it. Empty garages are an invitation for thieves to steal tools and other valuables.
Lock the door from your garage to your home, and remove your garage door opener from your car if you need to park outside overnight.

Winston Rowe & Associates, a national advisory firm that structures apartment and multifamily financing solutions nationwide. With no upfront or advance fees, for more information about them, you can give them a call at 248-246-2243

Winston Rowe & Associates has apartment building as well as other commercial real estate financing solutions in the following states.

Alabama, Alaska, Arizona, Arkansas, California, Colorado, Connecticut, Delaware, Florida, Georgia, Hawaii, Idaho, Illinois, Indiana, Iowa, Kansas, Kentucky, Louisiana, Maine, Maryland, Massachusetts, Michigan, Minnesota, Mississippi, Missouri, Montana, Nebraska, Nevada, New Hampshire, New Jersey, New Mexico, New York, North Carolina, North Dakota, Ohio, Oklahoma, Oregon, Pennsylvania, Rhode Island, South Carolina, South Dakota, Tennessee, Texas, Utah, Vermont, Virginia, Washington, Washington DC, West Virginia, Wisconsin, Wyoming

10 Best Cities for Retirees to Rent Homes or Apartments

NATIONAL APARTMENT LENDERS NO UPFRONT FEES

For retirees looking for a place to settle down more permanently, it pays to find a destination that meets the needs of this new lifestyle. Realizing rental needs change as people get older, Apartments.com evaluated cities across the country on a variety of key lifestyle factors:

High inventory of affordable apartments
Thriving economy
High retirement population
Weather
Flexible leasing options for short or long stays

The results, the 2013 “Top 10 Cities for Snowbirds and Retirees, places Austin, Texas at the top of the list, making it the number one hot spot for both snowbirds waiting out winter back home and those in it for the long haul, looking for a destination to lay down their roots and enjoy their retirement.

Average rent for a 2 bedroom apartment in Austin will run around $1,200.

The remaining cities on the retiree’s top 10 list, in order, include:

Las Vegas and Henderson, Nevada
Scottsdale, Arizona
San Antonio, Texas
Phoenix, Arizona
Dallas, Texas
Jacksonville, Florida
Plano, Texas
Overland Park, Kansas
Mesa, Arizona

How To Get An Apartment Building Loan With No Upfront Fees

WINSTON ROWE AND ASSOCIATES MULTIFAMILY LOANS

 

Winston Rowe & Associates, a national no advance fee apartment building consulting firm has the experience and expertise investors have come to expect for the due diligence and advisory service they need when structuring an apartment building loan.
Whether you are purchasing an apartment building or just need some help with refinance, let them help you out and reduce the anxiety of getting a loan.

When speed and experience are important and crucial to your apartment building success, contact Winston Rowe & Associates, a principle is always available to speak with prospective clients. They can be contacted at 248-246-2243 or email them at processing@winstonrowe.com

Winston Rowe & Associates will go over everything you will need to determine your loan amount but these are all very easy things and you probably have everything already.

The apartment financing industry is very competitive and many companies will give you a quick spiel that sounds good but might not tell you every detail.

Winston Rowe & Associates provides unparalleled service to its clients and is a recognized leader in structuring apartment building financing solutions.

They also have many other solutions that meet almost every need.

With their best business practices model ensures that their clients receive lighting fast funding with the most aggressive rates and terms available, while managing every step of the financing process from document collection to commitment negotiation and closing.

Winston Rowe & Associates provides no upfront or advance fee due diligence and advisory firm in the following states.

Alabama, Alaska, Arizona, Arkansas, California, Colorado, Connecticut, Delaware, Florida, Georgia, Hawaii, Idaho, Illinois, Indiana, Iowa, Kansas, Kentucky, Louisiana, Maine, Maryland, Massachusetts, Michigan, Minnesota, Mississippi, Missouri, Montana, Nebraska, Nevada, New Hampshire, New Jersey, New Mexico, New York, North Carolina, North Dakota, Ohio, Oklahoma, Oregon, Pennsylvania, Rhode Island, South Carolina, South Dakota, Tennessee, Texas, Utah, Vermont, Virginia, Washington, Washington DC, West Virginia, Wisconsin, Wyoming

Refinancing Apartment Buildings No Advance Fees

REVIEW WINSTON ROWE AND ASSOCIATES ON LINE

Winston Rowe & Associates structures customized apartment financing solutions through their best business practices advisory and due diligence methodologies to assist the individual and investment needs and requirements for apartment building investors nationwide.
Winston Rowe & Associates Multifamily Solutions:

Solutions starting at $500,000. through $100,000,000.
Conventional and Bridge Solutions
Debtor in Possession
Balloon Payments
Cash Out Refinance
Portfolio Repositioning
Rehabilitation & Re-Tenanting

The goal at Winston Rowe & Associates is to add value to client’s acquisition or refinance by offering a wide range of financing solutions and direct access to top national, regional, and local retail banks, hedge funds and private capital lenders.

Healthy Living Apartment Communities Where People Want To Live

Apartment Building Financing

Winston Rowe & Associates, a national no advance fees commercial real estate financier has developed this news article to provide some advice to apartment community owners with some tenant retention methodologies.
Health is a very important aspect of life. It is also something that is hard to make a priority amidst our busy schedules. Creating programs in your community can help promote good health and encourage people to work together and help socialization build between tenants. Thereby creating a community where families want to live.

Here are four tips to create healthy community initiatives.

Have a community garden; If there are spaces available outside or on the roof, make a garden where people can grow their own crops. You can either do a community garden or have individual plots which residents sign up for. Residents then have the ability to plant and eat their own crops, encouraging eating whole, fresh foods.

Host healthy cooking classes; Many people are not great chefs in the first place, but hosting classes where you can gather residents and teach them healthy techniques for preparing meals, they can become much better cooks.

Providing these opportunities can make a place where residents can come together, learn, enjoy good, healthy food together, and hopefully apply the things learned in their own kitchens.

Start running teams; Provide an opportunity for people to gather together, and instead of making exercise a chore, it will make exercise a social party! People can get friends to go running together, they can keep each other in check, and enter into community races to run with one another.

Start weight loss competitions; Creating a community goal to lose weight can encourage more people to jump on and work on their health. Have people set goals, track progress, and provide awards.

The goal at Winston Rowe & Associates is to add value to client’s acquisition or refinance by offering a wide range of financing solutions and direct access to top national, regional, and local retail banks, hedge funds and private capital lenders.

Hard Money Commercial Loans No Upfront Fees

Apartment Mortgage

Winston Rowe & Associates, a national no upfront fee advisory and due diligence firm specializes in structuring complex debt, private equity, private capital (hard money), and agency commercial real estate financing solutions.

Commercial real estate types include; Apartment Buildings, Hotels, Office Buildings, Medical Buildings, Shopping Centers, Assisted Living

Facilities, Senior Housing, Student Housing and Mixed Use properties, no raw land please.

They also have many other solutions that meet almost every need. Check them out online at http://www.winstonrowe.com

CRE investors have been turning to Winston Rowe & Associates, across the nation because there is a shortage of reliable, ethical and honest capital sources in the current banking market place.

Winston Rowe & Associates has strong relationships with a finite number of direct private capital, private equity, hedge funds, agency investors and regional and national commercial banks, each with a highly targeted commercial real estate financing practice.

Their expertise adds value and speed, structuring solutions for their client’s complex and challenging financing requests. In days, not weeks or months.

When speed and experience are important and crucial to your commercial real estate investing success, a principal at Winston Rowe & Associates is always available to speak with prospective clients.

They can be contacted at 248-246-2243 or email them at processing@winstonrowe.com

Hard Money Bridge Loans Close In Few Weeks:
Apartments, Office, Hotels, Shopping Centers, Medical Buildings
Minimum Loan Amount $250,000 to $100,000,000.
Two Week Fast Close with a Complete Loan File
Rates Starting at 8% Interest Only
Terms One Day to Three Years
Maximum Loan to Value 65%
Minimum FICO 680
Purchase, Refinance & Cash Out Refinance
Debtor In Possession (DIP) Chapter 11 Exit Financing
Discount Note Payoff
United States Only

They have a best business practices model ensures that their clients receive lighting fast funding with the most aggressive rates and terms available, while managing every step of the financing process from document collection to commitment negotiation and closing.

What To Do When Tenants Move Out To Keep Your Costs Down

Multifamily Family Building Investing

Apartment Building Investors  investors have been turning to Winston Rowe & Associates, across the nation because there is a shortage of reliable, ethical and honest capital sources in the current banking market place.

Winston Rowe & Associates has strong relationships with a finite number of direct private capital, private equity, hedge funds, agency investors and regional and national commercial banks, each with a highly targeted commercial real estate financing practice.

Checking the condition of the property is a must for two reasons:

You discover hidden damage while there is still time to deduct costs from the former tenant’s security deposit; and,

The new tenant won’t lose faith in you because the unit needs several repairs right out of the gate.

So, when it comes time for turnaround, make sure you take the time to thoroughly check out the property:

If possible, ask the exiting tenant to point out any minor repair items they may have been ignoring.

Check out the deadbolt locks on all exterior doors and look for signs of damage or wear.

Turn on all lights and replace any dead bulbs. This may reveal bigger problems like tripped breakers or other electrical problems.

Make sure the appliances are fully-functional.

Open up the blinds and check for damage to windows and sills.

Replace batteries in smoke detectors.

Check the water pressure.

Run the heat and air. Make sure thermostat is at an economical setting while the property is vacant.

Looks for signs of water leaks check floors, around facets and drains, and washing machine hoses.

Check for signs of pests.

Use this time to repair the minor items that can run up larger repair bills later on.

Winston Rowe and Associates, a no advance fee commercial real estate financier has commercial real estate financing solutions for qualified clients in the ensuing states.

Alabama, Alaska, Arizona, Arkansas, California, Colorado, Connecticut, Delaware, Florida, Georgia, Hawaii, Idaho, Illinois, Indiana, Iowa, Kansas, Kentucky, Louisiana, Maine, Maryland, Massachusetts, Michigan, Minnesota, Mississippi, Missouri, Montana, Nebraska, Nevada, New Hampshire, New Jersey, New Mexico, New York, North Carolina, North Dakota, Ohio, Oklahoma, Oregon, Pennsylvania, Rhode Island, South Carolina, South Dakota, Tennessee, Texas, Utah, Vermont, Virginia, Washington, Washington DC, West Virginia, Wisconsin, Wyoming

 

Winston Rowe & Associates Completes $1,000,000 Apartment Building Loan

WINSTON ROWE WEB SITE

Winston Rowe & Associates a national no upfront fee commercial real estate financier is pleased to announce the financing of a $1,000,000 129 unit apartment complex in Vicksburg, MS.

This was an extremely challenging transaction to complete their clients business declined when the recession hit, business plummeted, the personal credit score dropped, and owed back taxes and the apartment building suffered significant deferred maintenance.

Once the borrower was able to stop the free fall, the client’s financial situation was such that he was unable to find financing through traditional lenders.

At first glance, a half-vacant apartment building in Mississippi, with back property taxes and whose owner had less than ideal credit might not seem appealing to most lenders, but Winston Rowe & Associates was able to look past the flaws and develop a custom solution for their client.

Despite being half-vacant, the property had enough equity to provide an adequate loan to pay off the delinquent taxes, rehab the vacant units, and pay off the existing mortgage. By keeping a low loan-to-value, their capital source was willing to take a chance on this loan, despite the borrower’s poor credit.

Winston Rowe & Associates is always here to help and understands that many good borrowers were hurt by the recession.

For more information about Winston Rowe & Associates you can check us out online at http://www.winstonrowe.com or give us a call at 248-246-2243. A principal is always willing to speak with prospective clients.

Apartment Building Maintenance Tips

Apartment Building Maintenance Tips

If you’re like most landlords, you want a maintenance man at your employ for all those day-to-day, low-skill fixes. But sometimes you need to hire independent contractors because of their skill and speed in completing jobs, which is especially useful in an emergency.
Contractors come from many backgrounds — gardeners, electricians, plumbers.

The work they provide can help or hurt your investment depending on how effectively the work is performed.

You don’t want to rush to judgment when it comes to hiring a contractor, because a bad contractor — just like a bad tenant — will increase your costs and liability. You need someone you can depend on to do the job correctly and efficiently.

Here are a few things to consider:

Verify that they are licensed and have proper insurance. Insurance is a lifesaver. If you hire a contractor that isn’t licensed, your property insurance may not cover damage cause by a bad repair. It’s nice to know that if something goes wrong you have someone to hold accountable who is insured against their own mistakes. Being licensed and insured is usually a sign of a contractor who takes their work seriously and is trying to prove that they are a professional, and that’s what you’re paying extra for — professional repairs.

Check references. This is a really good idea, especially if you have to hire someone who isn’t local. You can ask for references from the contractor, or look online to see if there are any negative rants or ratings. You might also ask people in your circle if they can refer you a trusted contractor for whatever repairs you’er facing.

Never pay in full until the work is completed. Don’t set yourself up by trusting a contractor too much. This also means that it is generally unwise to pay in cash. You should think about writing a check to their company name. Keeping paperwork is essential. Always have everything written up on an invoice and signed. Include a detailed description of the work to be performed as well of a list of specific materials and equipment to be used.

Independent contractors are a great way to repair your dwellings quickly and correctly, but make sure you’re not putting yourself into a situation that is going to take a chunk out of your investment.

Apartment Rents Trending Upward Nationwide – Winston Rowe & Associates

MULTIFAMILY LENDERS ONLINE WITH NO ADVANCE FEES

Multifamily Market Update 2014

Winston Rowe & Associates, a national no advance fee commercial real estate finance firm has prepared this Apartment Building Market Update to assist investors.

Year To Date Market Update:

The year-to-date effective rent growth in the U.S. apartment market is the best since the nation’s economy started to recover from the Great Recession, Axiometrics Inc., reports.

Axiometrics, the Dallas-based leader in apartment research and reporting, found that effective rent growth rose to 3.4% in April, up from 3.1% in March 2014 and 3.2% in April 2013. Increased occupancy and burgeoning job growth provide landlords the ability to push rents higher.

Apartment occupancy increased in April to 94.8%, a 60 basis point rise since the beginning of the year. Meanwhile, job growth was 1.6% in March, and the unemployment rate dropped to 6.3% in April. As a result, Axiometrics analysts say, more people were looking for housing in what is already a landlord’s market.

“These outstanding April numbers exceeded expectations,” said Jay Denton, Axiometrics Vice President of Research. “Whether performance continues to exceed expectations for the rest of the year will depend on numerous factors.”

For example, more than 200,000 new units are slated for delivery during the rest of 2014, according to Axiometrics’ surveys of properties under construction or in the planning stages. And new wrinkles always arise: For example, many mortgage lenders in early May started lowering credit-score requirements, meaning more renters could join the home-buying market.

How this reconciles with the bias toward renting among people in their 20s and 30s remains to be seen. Axiometrics’ forecasts that occupancy will slow down and draw closer to the long-term average by the end of the year as supply begins to catch up with demand.

Class A Building Strength

Though Class B properties continue to generate the strongest annualized effective rent growth among asset classes in April at 3.6%, the newer, shinier Class A properties surged in April, jumping to 3.5% growth from 2.6% in March, according to Axiometrics statistics.

Class A effective rent growth is the highest since June 2013 and marks recovery from a dip that took the rate as low as 2.1% in November 2013. Class B properties had a much smaller dip in effective rent growth, bottoming out at 3.0% in November and December 2013. Class C effective rent growth has been relatively steady, though that rate declined slightly in April, dropping to 3.3% from March’s 3.5%.

Classes A and B both sport an occupancy rate of 95.1%, up from 94.9% in March. Class C occupancy lags at 93.9% for April, up from 93.6% in March and almost one full percentage point higher than the 93.0% of April 2013.

Top- and Bottom-Performing Markets

As has been the trend, California, Florida and Texas placed several markets among the best-performing metro areas for annualized effective rent and revenue growth.

Odessa, Texas, with the thriving Eagle Ford Shale in its backyard, tops the chart for a consecutive month, though its rate of growth has declined in the past year. Naples, Fla., is No. 2 and has been among the leaders for several months. Unlike Odessa, its effective rent and revenue growth rates are soaring compared to the previous year.

Winston Rowe & Associates always welcomes the opportunity to speak with clients directly. The can be contacted at 248-246-2243 or visit them on line at http://www.winstonrowe.com

Winston Rowe & Associates provides no upfront or advance fee due diligence and advisory services in the following states.

Alabama, Alaska, Arizona, Arkansas, California, Colorado, Connecticut, Delaware, Florida, Georgia, Hawaii, Idaho, Illinois, Indiana, Iowa, Kansas, Kentucky, Louisiana, Maine, Maryland, Massachusetts, Michigan, Minnesota, Mississippi, Missouri, Montana, Nebraska, Nevada, New Hampshire, New Jersey, New Mexico, New York, North Carolina, North Dakota, Ohio, Oklahoma, Oregon, Pennsylvania, Rhode Island, South Carolina, South Dakota, Tennessee, Texas, Utah, Vermont, Virginia, Washington, Washington DC, West Virginia, Wisconsin, Wyoming

Investing Guide For Apartment Buildings

Real Estate Investing

Winston Rowe & Associates a no upfront fee commercial real estate finance firm understands that picking the right apartment building investing strategy in the beginning will go a long way towards your success in the long run.

Economy of Scale:

An economy of scale is when you increase the efficiency of your business because you reduce expenses by buying in bulk.  In the case of buying apartment buildings, a 6-unit apartment building roof replacement expense would typically cost just a little more than a single family home roof replacement.

While your expenses for that roof replacement are similar, the income from the 6-unit would be much higher.  The economies of scale on your 6-flat apartment house would be much better than your single family investment.

Pick Quality Apartment Buildings:

Buy properties that will have positive cash flow from the start, based on the current income and all of your projected expenses including management.

If the current owner doesn’t have management, that is his problem. You are an investor, not a manager, and a good income property should pay for management and still produce positive cash flow.

Detailed Property Inspection:

Do an interior inspection to learn about the place, the tenants, and any problems that you will have to fix in the coming months or years. Look for pests, water and fire damage, as well as obvious “problem tenants. Are there any empty apartments that are listed as occupied? Use professional inspectors as needed for pest inspections and safety inspections.

For the exterior inspection, you will want to first walk around and take notes. Watch for anything that looks unusual or in need of repair.

Then you can get professional inspections, if necessary. You want to verify that the electrical and plumbing systems are up to date and meet current codes. You also want to get an estimate on how many years of use the roofing has left. You’ll look at driveways, landscaping, and exterior paint condition.

Due Diligence Investigation:

Here’s a simple definition of the term: “Investigation and verification of the details of the material facts for a particular investment.” You can start this process before you make an offer, but you should also have clauses in the offer that allow you to have inspections done, and reviews of the books and certain documents.

Verify The Business Income:

You’re buying a business; make sure it makes economic sense. Get the last 36 months income and expense statements, business tax returns with all schedules, all of the seller’s title paperwork, check the County Register of Deeds for liens,  judgments or back taxes and look for anything unusual, like expenses that are too low or income that seems too high. Review the rent roll, and find out if the rents are over or under the market rates for the area. If there are employees, look at the payroll records for any surprises.

 

 

Apartment Building Financing Fundamentals Winston Rowe & Associates

Apartment Financing

Based on Winston Rowe & Associates recent market analysis apartment buildings are gaining popularity due to exceptional levels of high occupancy combined with the low inventory nationwide.

This article has been prepared to provide their clients with an understanding of apartment building financing fundamentals.

If you would like additional information about Winston Rowe & Associates national apartment building financing platform, they can be contacted at 248-246-2243 or visit them on line at http://www.winstonrowe.com

CRE investors new to multifamily ownership most likely want to know as much as possible about the world of financing. While each transaction is unique and underwritten on its own merits it’s worth knowing that there are a few basic requirements commercial lenders use.

The Collateral:

Believe it or not with very few exceptions lenders do not like distressed properties and REOs. These apartment buildings come with a myriad of problems such as high vacancies, management and tenants issues, title, lack of maintenance and or upgrades, local economy, and in many cases inability to service debt. As a result, hard money may be one of the very limited financing options requiring a 50% or more down payment.

For conventional transactions great emphasis is placed on the property and its condition. In case of foreclosure, the lender wants to be sure it has a marketable property. This is the reason for which the lender will typically not allow the borrower to choose the appraiser.

The commercial appraisal is detailed and it utilizes three variables to derive the property value: income approach, replacement cost, and sales comparison method. The income approach carries the utmost important factor in determining the collateral approval. A building could be fancy, well-maintained, and in a great location, but if the income is not there to support the value the collateral does not pass the test.

The Cap Rate:

Among other factors worth mentioning are the age and condition of the property, the vacancy rate, and the area market capitalization rate. The “Cap Rate” is a ratio used to determine a property’s value based on its generated income. It’s computed by taking the rental net operating income (NOI) and dividing it by the property’s fair market value (FMV) or sales price.

The lender will then compare the property’s Cap Rate with the general area’s rate for similar properties. The red flag arises when the ratio is lower than the norm, therefore a higher cap rate is certainly desirable. Conversely, a very high ratio raises another red flag. Rest assured that an underwriter would question why a property has such a high ratio. Are there any underlying issues that could potentially affect the property in the future? Remember that an underwriter has a detective’s eye; they are looking for what could go wrong before looking at the positives.

The Cash Flow & DSCR:

Cash flow plays a significant role when underwriting a multifamily loan. Within the industry the cash-flow analysis is known as the Debt Coverage Ratio ( DCR). Such ratio measures the property’s net income ability to cover the annual debt service. The lender will analyze the property’s rent-roll – and the financials – and determine the annual income and expenses. After that it determines if the annual cash flow can service the new debt.

The DCR is calculated by dividing the property’s annual NOI by the property’s projected annual debt service (based on the new loan). Annual debt service includes the principal and interest payment only. Taxes, insurance, and the rest of the expenses have already been deducted when determining the NOI. Lenders are looking to see a minimum of 1.25 ratio, meaning that for every $1 of debt service the property must generate a minimum of $1.25 in net operating income. So, let’s say a building’s NOI is $35,000 while the annual P&I is $27,000 (or $2,250 monthly). The resulting DCR is 1.29, a ratio within the guidelines. However, a mere increase of a half percent on the rate could bring down the ratio below 1.25 thus putting the loan in jeopardy of being denied.

Borrower Strength:

Most loans funding today are recourse loans. It means that lenders are not satisfied with the collateral only and you, as the borrower must provide a personal guarantee; which implies that your credit and financial strength will be scrutinized. Keep in mind that even if title to the property is vested in the name of a corporation, LLC, or some other form, lenders still require personal guarantees from their owners or members.

Underwriting trend is rather conservative so lenders expect you to prove a great credit history, sufficient apartment building experience, and a decent net worth with a generous amount of liquid funds. When it comes to the capital invested or equity owned most programs want to see the borrower’s equity at twenty percent or more. Your net worth should look impressive. Fannie Mae, for instance, wants to see the borrower’s net worth be at least the loan amount requested.

Winston Rowe & Associates has a core focus on building long-term relationships, delivering exceptional and individualized customer service, and positioning financial products that best achieve their client’s goals.

Winston Rowe & Associates has an excellent free knowledge based resource for commercial real estate, valuation and market analysis located at:

http://www.winstonrowe.com/Free_Real_Estate_Resources.html

Winston Rowe & Associates has no upfront free commercial real estate financing solutions and in the following states.

Alabama, Alaska, Arizona, Arkansas, California, Colorado, Connecticut, Delaware, Florida, Georgia, Hawaii, Idaho, Illinois, Indiana, Iowa, Kansas, Kentucky, Louisiana, Maine,  Maryland, Massachusetts, Michigan, Minnesota, Mississippi, Missouri, Montana, Nebraska, Nevada, New Hampshire, New Jersey, New Mexico, New York, North Carolina, North Dakota, Ohio, Oklahoma, Oregon, Pennsylvania, Rhode Island, South Carolina, South Dakota, Tennessee,   Texas, Utah, Vermont, Virginia,   Washington, Washington DC, West Virginia, Wisconsin, Wyoming

Renters Facing Tough Affordability Issues

Real Estate Investing 

Affordability problems for renters have skyrocketed over the past decade both in number and the share of renters facing them, according to a new report on rental housing from the Harvard Joint Center for Housing Studies. The inability of so many to find housing they can afford dramatically impacts the health and well-being of U.S. renters, as lower-income households cut back on food, healthcare, and savings, just to keep up.

The report, “America’s Rental Housing: Evolving Markets and Needs,” finds that half of U.S. renters pay more than 30 percent or more of their income on rent, up an astonishing 12 percentage points from a decade earlier. Much of the increase was among renters facing severe burdens (paying more than half their income on rent), boosting their share to 27 percent. These levels were unimaginable just a decade ago, when the share of American renters paying half their income on housing, at 19 percent, was already a cause for serious concern.

Escalating rental affordability problems come at a time when the share of Americans that rent has increased from 31 percent in 2004 to 35 percent in 2012. In fact, the 2000s marked the strongest numerical growth in renter households in the last fifty years. As ownership rates fell, housing markets have adjusted dynamically to the increased demand for single-family rentals, with about three million existing homes switching from owner to rental occupancy from 2007-2011 alone.

“The Harvard study also emphasizes the importance of the Low Income Housing Tax Credit, the premier financing tool for the construction of affordable rental housing, and warns of the dangers in eliminating or curtailing this program,” said Rick Judson, chairman of the National Association of Home Builders (NAHB) and a home builder and developer from Charlotte, N.C. “NAHB agrees with the report’s findings that such an action ‘would create a substantial void in affordable housing production and preservation.”

On the strength of the surge in rental demand, rental vacancies have fallen, rents have climbed, and construction of new rental housing has picked up sharply, giving an important spur to the struggling residential construction market. Rising rents combined with softness in wages has put the squeeze on affordability. The report points out that between 2000 and 2012 real median rents (adjusted for inflation) nationally increased by six percent, while over the same period the real median income of renters dropped by 13 percent. More than ever before, the private market struggles to provide decent housing that is affordable for people of even modest means.

“The gravity of the situation for the large proportion of renters spending so much of their incomes on housing is plain,” said Eric Belsky, managing director of the Joint Center for Housing Studies at Harvard, which publishes its report on the state of rental housing in the U.S. every other year.  “We are losing ground rapidly against a chronic problem that forces households to cut essential spending. With little else to cut in their already tight budgets, America’s lowest-income renters with severe cost burdens spend about $130 less on food each month, and make similar reductions in healthcare, clothing, and savings.  And while many choose longer commutes to lower their housing costs, the combined cost of housing and transportation means even less remains for other expenses.”

“For many low-income families, the rental housing affordability crisis is like a game of musical chairs in which there is never a chair left for them,” said Chris Herbert, research director at the Harvard Joint Center for Housing Studies. “The shortfall in the number of units affordable to extremely low-income renters in the U.S. (those earning no more than 30 percent of the area median) more than doubled from 1.9 million in 2001 to 4.9 million in 2011. The situation just keeps getting worse. Assistance efforts have failed to keep pace with escalating need, undermining the nation’s longstanding goal of ensuring decent and affordable housing for all.”

Judson said, “”It is clear that the federal role in ensuring the availability of financing for multifamily rental housing for low- and moderate-income households is critical. Other ways to reduce the costs of providing affordable housing must be pursued as well, such as strengthening the Low Income Housing Tax Credit program, removing regulatory barriers to construction, providing gap financing to help reduce construction costs, streamlining program rules and allowing agencies to align administrative procedures across programs.”

No Upfront Fees Commercial Loans

No Upfront Fees Commercial Loans

When it comes to investing in multifamily housing properties, often times the difference between a good investment and a great investment is financing.

Winston Rowe & Associates has a comprehensive mix of highly customized multifamily and apartment building no upfront fee loan programs to maximize investors returns.

Freddie Mac Multifamily Small Balance Loan Program:

The Freddie Mac Small Balance Apartment Loan program fills a gap in the small multifamily loan space ($1MM-$7.5MM) for borrowers seeking competitively priced, non-recourse debt without yield maintenance, or a balloon payment at the end of the fixed term.

Bank Balance Sheet Apartment Loans:

By working with the most competitive and aggressive banks in the country, they can custom tailor financing based on location, property characteristics, and investor profile.

Fannie Mae Multifamily Loans:

The Fannie Mae DUS Multifamily Loan platform is one of the single largest sources of capital to the multifamily housing market. Hedge interest rate risk with fixed rate terms up to 30 years, maximize cash flow with low rates and interest only payment options, and maximize leverage with up to 80% LTV.

HUD FHA Multifamily and Apartment Building Loans:

HUD FHA apartment loans are a great financing option for borrowers looking for maximum leverage and longer fixed rates and terms, financing also available for healthcare properties through FHA Section 232.

Private Capital, CMBS, Life Company and REIT:

The capital and secondary markets play an important role in providing both debt and equity to the multifamily housing community.

National Apartment Financing Loans

Winston Rowe & Associates provides solutions for apartment building financing nationwide, whether it is for purchases, new construction, cash outs or refinancing. They also provide other types of multifamily financing, including mixed-use properties. If the property has a combination of apartments, offices or any other income producing types, they can help.

They have many flexible apartment financing options and are able to meet the needs of their clients. Whether you are looking to refinance your apartment loan or obtain a purchase apartment loan, they will structure the best-fit apartment loan program for your situation.

Winston Rowe & Associates Apartment Financing Options:

No Upfront of Advance Fees
Apartment loans are available on fixed and variable rate financing on 5 or more units
Apartment loan size varies from $500,000 to $100,000,000.
Apartment financing LTV/CLTV permitted up to 85%
Apartment financing is available nationwide
Apartment loan rate fixed terms: 3-30 years
Apartment loan closing as soon as 30 days
Apartment debt coverage ratio: 1.05 to 1.25
Cash-out available on some apartment loans

Winston Rowe & Associates has no upfront free commercial loans in the following states.

Alabama, Alaska, Arizona, Arkansas, California, Colorado, Connecticut, Delaware, Florida, Georgia, Hawaii, Idaho, Illinois, Indiana, Iowa, Kansas, Kentucky, Louisiana, Maine,  Maryland, Massachusetts, Michigan, Minnesota, Mississippi, Missouri, Montana, Nebraska, Nevada, New Hampshire, New Jersey, New Mexico, New York, North Carolina, North Dakota, Ohio, Oklahoma, Oregon, Pennsylvania, Rhode Island, South Carolina, South Dakota, Tennessee,   Texas, Utah, Vermont, Virginia,   Washington, Washington DC, West Virginia, Wisconsin, Wyoming

Refinancing Apartment Complexes No Advance Fees Winston Rowe & Associates

When it comes to refinancing multifamily housing properties, often times the difference between a good investment and a great investment is financing.

Winston Rowe & Associates understands this and that’s why they have developed a comprehensive mix of highly customized multifamily and apartment building refinancing programs to help maximize your return based on the individual needs and requirements of you and your apartment building investment.

Winston Rowe & Associates apartment building loans are offered at competitive rates, so owners and investors can spend less on interest and fees and turn an even bigger profit from their investment in an apartment building or complex.

Apartment Complexes Financing Solutions:

No upfront or advance fees

Loans available nationwide

Loan amounts start at $500,000. with no upper limit.

Up to 30-year amortization

For purchases refinances and cash-out refinances

Quick closings

When speed and experience are important and crucial to your commercial real estate investing success, a principal at Winston Rowe & Associates is always available to speak with prospective clients. They can be contacted at 248-246-2243 or check them out online at http://www.winstonrowe.com

Refinancing loans are available to save current owners money on their mortgage loan payments in the following states.

Alabama, Alaska, Arizona, Arkansas, California, Colorado, Connecticut, Delaware, Florida, Georgia, Hawaii, Idaho, Illinois, Indiana, Iowa, Kansas, Kentucky, Louisiana, Maine,  Maryland, Massachusetts, Michigan, Minnesota, Mississippi, Missouri, Montana, Nebraska, Nevada, New Hampshire, New Jersey, New Mexico, New York, North Carolina, North Dakota, Ohio, Oklahoma, Oregon, Pennsylvania, Rhode Island, South Carolina, South Dakota, Tennessee, Texas, Utah, Vermont, Virginia, Washington, Washington DC, West Virginia, Wisconsin, Wyoming

Maximizing Apartment Building Investments

Winston Rowe & Associates, a national no upfront fee commercial real estate financier has prepared this news article to present strategies for apartment building owners to maximizing their investment.

Real estate investors, especially those that invest in residential apartment buildings or entire complexes, have a wide range of products and services at their disposal to help ensure they keep their units filled and properly maintained.

As we all know, each time an apartment turns-over it costs money in order to prepare the apartment for the next resident. It must be cleaned, often updates may be necessary, such as replacing counter tops, appliances, carpeting and tiles.

The better resident you can place and the longer they stay the more money you save. One of the main ways to maintain residents is to provide a wide range of amenities and keep the property well maintained. Not just the interior, but the exterior and the surrounding grounds like fountains, playgrounds, pools, gym-facilities and dog areas.

There are several products and services that can help building management find the right residents. Other than screening and conducting the proper credit procedures, having a company in place to take care of the maintenance is another key area of importance.

Hiring the right property management firm can be instrumental in helping apartment building owners keep their properties attractive to the right kind of renters and maintain the property inside and out in order to maintain the integrity of the asset.

Many property management companies offer a wide range of products and services that will keep a property well-maintained. They can create a schedule of services to make sure that all units get seasonal maintenance several times a year.

Winston Rowe & Associate has commercial real estate financing solutions for apartment building investors in the ensuing states.

Alabama, Alaska, Arizona, Arkansas, California, Colorado, Connecticut, Delaware, Florida, Georgia, Hawaii, Idaho, Illinois, Indiana, Iowa, Kansas, Kentucky, Louisiana, Maine,  Maryland, Massachusetts, Michigan, Minnesota, Mississippi, Missouri, Montana, Nebraska, Nevada, New Hampshire, New Jersey, New Mexico, New York, North Carolina, North Dakota, Ohio, Oklahoma, Oregon, Pennsylvania, Rhode Island, South Carolina, South Dakota, Tennessee, Texas, Utah, Vermont, Virginia, Washington, Washington DC, West Virginia, Wisconsin, Wyoming

Non Recourse Commercial Loans No Advance Fees Apartments

No Recourse Commercial Mortgage

Winston Rowe & Associates targets hard-to-finance transactions – loans which are unable to be secured from conventional lenders due to problems with the real estate, problems with the borrower or principals of borrower, problems with the transaction itself, or any combination.

Winston Rowe & Associates is a nationwide commercial real estate advisory and finance firm. offers a diverse mix of commercial real estate loans to meet the individual borrowing needs and investment objectives of its borrowers, for both investment and owner-occupied commercial properties.

They can carefully structure the right financing solution no matter how small or large your transaction requires. Depending on the deal, Winston Rowe & Associates can offer recourse and non-recourse commercial real estate financing options.

Their knowledge and depth of expertise maximizes efficiency and becomes their client’s advantage.

Winston Rowe & Associates is a unique type of commercial real estate finance firm, they do not charge any upfront fees like their competitors to review or perform due diligence for your transaction, because of this savvy investors have been turning to them for their financing needs.

Winston Rowe & Associates considers the ensuing property types for capital deployment.

Apartment Building

Office Building

Industrial Property

Shopping Centers

Car Washes

Retail Centers

Mixed Use

Assisted Living Facilities

Medical Centers

Hotels & Resorts

Winston Rowe & Associates is eager to deploy capital in the following US states.

Alabama, Alaska, Arizona, Arkansas, California, Colorado, Connecticut, Delaware, Florida, Georgia, Hawaii, Idaho, Illinois, Indiana, Iowa, Kansas, Kentucky, Louisiana, Maine,  Maryland, Massachusetts, Michigan, Minnesota, Mississippi, Missouri, Montana, Nebraska, Nevada, New Hampshire, New Jersey, New Mexico, New York, North Carolina, North Dakota, Ohio, Oklahoma, Oregon, Pennsylvania, Rhode Island, South Carolina, South Dakota, Tennessee, Texas, Utah, Vermont, Virginia, Washington, Washington DC, West Virginia, Wisconsin, Wyoming

How To Invest In Multifamily and Apartment Buildings Winston Rowe & Associates

How To Invest In Multifamily and Apartment Buildings Winston Rowe & Associates

Winston Rowe & Associates has prepared this article to provide prospective clients with a strategic overview of the mechanics of investing in multifamily and apartment buildings. Winston Rowe & Associates is a national commercial real estate finance firm specializing in no advance fee loans.

For more information about apartment building investing you can go to http://www.winstonrowe.com or contact Winston Rowe & Associates directly at 248-246-2243.
Overview:

Rental property that has more than one family unit is considered multifamily property. From a duplex (two units), the smallest multifamily property, up from there to larger rental complexes easily consisting of hundreds of apartments.

The advantage of purchasing multifamily properties, not unlike all income property, is that it provides real estate investors with the ability to support debt from the income the property produces. Understood in real estate investing circles as “using other people’s money”, this idea is crucial to buying multifamily properties profitably and therefore must always be kept in mind because the success or failure of the investment depends on the income the property generates to meet debt service and other obligations required to keep the property.

Enough said. Let’s look at three elements that contribute to this principal, and discuss why they are crucial to buying multifamily units profitably.

Obtaining Financing:

The key to buying any investment property is for you to establish a sound financing package. You want to obtain a loan that doesn’t place excessive burdens on the property, or yourself. Also, given that lenders evaluate multifamily real estate based on income stream and generally structure a loan based on the property’s financial strength as well as the investor’s, bear in mind the significant role the principal of using other people’s money plays in financing the investment.

When applying for a loan on a multifamily apartment, present lenders with clear and concise cash flow reports because you are more apt to obtain a favorable financing package when the property is represented fairly to the lender and the income and operating expenses are shown to be accurate.

Research & Market Analysis:

What tenants are willing to pay to occupy a unit in the apartment is the cornerstone of the investment. Therefore, it’s incumbent upon real estate investors to understand local rental market trends for vacancies and rental rates when buying multifamily real estate property. Rental market trends are easy for investors to recognize, just watch the newspaper or drive around the community noting all rental properties that have vacancies. If you see few for rent ads or signs, or surmise that rents are increasing, it probably signals a shortage of rental units, and a favorable opportunity for you. On the other hand, when lots of rental signs start appearing and rents drop, it could spell trouble for multifamily real estate.

If you’re looking for real estate properties for commercial investing or need background information on an asset? The following link will take you directly to Winston Rowe & Associates Free commercial real estate and investing resources:

http://www.winstonrowe.com/Free_Real_Estate_Resources.html

The best time to own multifamily property, naturally, is when vacancy rates decrease and tenants are standing in line to rent an apartment. Apartment property owners can be more selective about the type of tenant they rent to and establish a positive direction for the complex, perhaps even increasing rents.

On the other hand, when tenants become scarce, owners might have to become less selective about tenants and perhaps lower the rents just to fill the units.Be sure not to neglect a rental market survey whenever you purchase multifamily property. It’s always crucial to gauge the rents and vacancy rates.

Economic Conversion:

There might be money to be made in cases where the former property owners have let the property run down and rents had to be decreased to keep the units filled. If these rental properties are in a good area of town or in an area that is returning to a former higher quality, then the remodeling of a rundown apartment complex can be a profitable venture. Just make sure that you ascertain the cost for remodeling and understand what impact it will have on your income stream.

Pure window dressing for the sake of appearances only, unless it has a positive influence on occupancy levels or rents, is typically avoided by prudent real estate investors. So get a qualified contractor to give you a bid on remodeling. Otherwise, what you surmised as surface issues when you were buying the multifamily units could in fact be a costly can of worms.

In other words, look for an opportunity to upgrade the building and raise rents because it can contribute to a profit, just be sure that you know exactly what you’re getting into.

Pros & Cons of Buying Multifamily Property:

The most obvious advantage of buying any income property is real estate investors can grow wealthy in the long run. Holding on to investment property and simply letting other people’s money payoff the debt, even if there is no immediate cash flow, is what drives people into real estate investing. Moreover, because multifamily properties serve a basic need in that they provide shelters to those who cannot afford or who do not choose to buy real estate, the downside risk to multifamily investing is limited.

The downside to owning rental property mostly concerns the management problems associated in dealing with tenants. Multifamily properties can be management intensive, and often the reason why investors who purchase rental property hire the services of a professional property management company to deal with the day-to-day issues of running the property. So you can choose to minimize this disadvantage if you care to.

The bottom line is straightforward. Multifamily property provides investors the opportunity to build wealth. Nonetheless, it’s similar to investing in any other type of investment property, whether it’s land or commercial real estate or apartments, it simply requires you to do it correctly, and with a careful eye on the elements discussed here. Here’s to you and your real estate investing success

Winston Rowe & Associates success is measured by their clients’ success, and their mission is to be your source for the most appropriate – and advantageous – apartment building financing solution that helps client achieve their goals.

Investing In Multifamily Housing and Apartment Buildings Financing Alternatives

Investing In Multifamily Housing and Apartment Buildings Financing Alternatives

Winston Rowe and Associates, a no upfront fee commercial real estate financier. They‘ve developed a comprehensive mix of highly customized multifamily housing and apartment building funding solutions.

When it comes to investing in multifamily housing and apartments properties, often times the difference between a good investment and a great investment is financing.

For more information about Winston Rowe and Associates you can contact them at 248-246-2243 or check them out on line at http://www.winstonrowe.com

Multifamily housing and Apartment Financing Options:

Conventional Purchase, Refinance and Cash Out

Nationwide

75% LTV purchase

60% LTV Refinance

Minimum capital deployment $1 MM

Hard Money and Private Capital Purchase, Refinance and Cash Out

65% maximum loan to value

Minimum capital deployment $500,000

Chapter 11 Debtor in Possession Financing

50% maximum Loan to Value

Minimum capital deployment $1 mm

Discount Note Financing

Maximum Loan to Value 60%

NO new cash required

Minimum capital deployment $1 mm

The goal at Winston Rowe & Associates is to add value to client’s acquisition or refinance by offering a wide range of financing solutions and direct access to top national, regional, and local retail banks, hedge funds and private capital lenders.

Common Maintenance Emergencies For Multifamily Properties Winston Rowe & Associates

Common Maintenance Emergencies For Multifamily Properties Winston Rowe & Associates

The goal is to solve the emergency as quickly and safely as possible. And with a result that both property managers and tenants will feel satisfied with the way their discomfort was addressed and resolved.

1 Flooded Basement or Ground Floor:

Generally caused by piping failures or harsh weather, indoor floods are just as dangerous as they are inconvenient.

Flood water cause major health complications, these range from being exposed to sewage, inviting mosquitoes and parasites, and kick starting toxic mold growth.

Get started with clean-up and repair efforts as quickly as possible, especially to salvage materials and avoid thousands of dollars worth of damage.

If the cause of the flood can be easily identified as a burst pipe, the water supply must be immediately turned off. If the flood has reached exposed outlets, plugs, and wires, it’s then important to turn off power and contact a professional for the assessment of whether the area presents a serious electrical hazard.

Pumps, wet-dry vacuums and eventually fans and dehumidifiers can be helpful with drying out the space once the majority of the water has been drained.

If the flooding is unrelated to burst piping, it’s adequate to contact a professional for the assessment of whether the flood water is dangerous/toxic, and proceed with water removal and repair. Consult a second expert contractor regarding how floods can be prevented in your particular case (adding insulation, creating barriers, reconfiguring basements, etc.)

2 Bursting Pipes:

A frozen pipe that bursts means water can find its way inside a property.

In case of a burst pipe, immediately turn off the water supply. If the space is flooded, it’s appropriate to proceed as described above, with initial safety checks followed by water and furniture removal.

It’s then fundamental to contact a professional plumber for the repair of the burst section, but also for a consultation regarding how it would be best for your case to prevent burst pipes in the future.

3 Water Heater Bursts:

A burst water heater will try to continue re-filling, causing water to continue on spilling and flooding the space.

First, if the heater is electric shut off the breaker to power it down. Gas heaters need to be shut off by utilizing the proper valve.

It’s best to then call the manufacturer of the appliance and your insurance company to resolve how to repair or replace the heater, and whether any items are protected under your insurance package.

4 Pilot Light Shutting Off:

A tenant waking up in a house or apartment without hot water is a particularly uncomfortable experience.

A water heater or furnace without an active pilot light is likely what is causing the problem.

Fortunately, some appliances feature ignition buttons for easily relighting the pilot light. But, this must be done safely. The gas supply needs to be cut off and the area around the appliance needs to be allowed to be properly ventilated.

If you smell the characteristic “rotten egg” scent of natural gas lingering in the space and the smell persists for longer than an hour, leave the property and call the utility company.

You need a professional to check whether there is a gas leak or any gas-related hazard, investigate the issue, and determine whether other parts of the system should be addressed and replaced.

5 Junction box and Electrical Fires:

Old or incorrectly set-up wiring can be responsible for sparking dangerous electrical fires.

While junction boxes are supposed to help with containing sparks, they are no help if a fire actually catches on.

If smoke or visible flames are spotted, the electricity must be immediately shut off, and the fire department should be alerted.

If flames are burning, it would be adequate to have a Class C or multipurpose fire extinguisher at hand to try and put out the fire as long as it is safe to do so. Following the incident, contact an electrician to check on your property’s wiring to determine what caused the issue.

6 Backed-Up Septic Tank:

A backed-up septic tank will overflow
and allow spilled toxic waste to flow near or even into a property.

This is not just disgusting and smelly, but also dangerous and damaging.

Septic waste carries bacteria and disease, and can impregnate and linger into most surfaces it touches upon contact.

The best way to address this issue is to be proactive with clean-up, removing waste as it surfaces and removing – ideally disposing of – any contaminated furniture and objects. Spaces should be disinfected with a bleach solution, and a septic tank specialist should be called immediately to investigate the source of the problem.

7 Roots Growing In Sewer Line:

Tree roots are naturally attracted to the nutrients and moisture that are found within sewer lines.

Roots can easily sense and access pipes that are cracked or damaged by wear and time.

As roots infiltrate the system and grow longer and larger, the line can be completely burst or become backed-up, which becomes visible by above-ground or in-home resurfacing of sewage.

If waste floods a space, proceed as outlined in the “backed-up septic tank” scenario.

In these situation, it is best to contact a professional to arrange the removal of the tree completely, and it is fundamental to try and avoid planting trees within 10 feet of a sewage line, or implement an underground barrier system to protect pipes.

Winston Rowe & Associates published this article, they are national commercial real estate financiers and publishers of  Free eBooks.

You can contact them at 248-246-2243 or visit them online at http://www.winstonrowe.com