19 Sep Good, Better, Best – Discussing Debt at our Latest Education Series Event
Now that fall is here we’re pleased to bring back our Good, Better, Best Education series. We recently hosted a well-attended event at our office with Cheryl Higley, a lender with Berkeley Point Capital. Berkeley Point Capital offers a full complement of Fannie Mae, Freddie Mac, FHA, Life Company, and Conduit loan products, and has a 30-year history with the multifamily industry. Cheryl herself has over 20 years of commercial real estate finance experience, with 15 of those years focused primarily on multifamily agency executions – affordable as well as market rate properties.
Cheryl talked about the factors that affect loans, the different types of loan structures, and how sponsors consider the exit strategy from a project is an important consideration for investors.
She also spent some time discussing the factors that make Texas markets some of the best in the country for investors, including lower cost of living, favorable taxes, and a booming economy with plenty of higher education to keep fueling it.
Exit Strategy is Important
Matching your investment strategy exit with your goals will help you choose the best loan prepayment option, Cheryl said, whether it’s yield maintenance or step down prepays.
“A lot of times sponsors want the cheapest rates, but you have to know all the factors,” she said. “If you’re going to put $50,000 or $100,000, or more into a project, you should ask questions. Looking at exit strategies is important, and who you’re working with is important.”
Even from one year to the next the type of loan that’s best for your investment goals may change, Cheryl said.
Researching the Market
Finally, she emphasized that if your sponsor can’t answer basic questions about why they’re choosing what type of loan, you need to consider whether or not you are with the right sponsor.
Presario Principal and Co-Founder Darin also talked about the research and market analysis that goes into the investment strategy for each of Presario’s projects. Darin detailed the discussion around a project that’s now under construction on the northwest side of San Antonio, Exeter Place. After talking with the developer and lender, Presario secured a preferred equity position and an agreement for cash up front from the developer. The lender also agreed to terms that will let Presario refinance with more years of interest-only payments if the market changes.