| https://flic.kr/p/D7zYy1 The housing market and the apartment market are not moving the same right now. Single family foreclosures are going up, but that is mostly a return to normal. Apartments are under more pressure. Delinquency rates on multifamily loans have climbed, with some segments near 7 percent. The issue is not the property. It is the debt. A lot of owners used short term, floating rate loans. Payments jumped, but income did not keep up. Now the numbers do not work. At the core, it comes down to something simple. The money coming in has to exceed the money going out. When that is off for too long, debt starts to pile up. I recently spoke with an owner whose loan is coming due. The property is full and running fine, but the new payment is almost double. The bank will not refinance, and selling will not pay off the loan. Not in foreclosure yet, but getting close. I have seen this before. Early in my career, I was growing revenue but adding debt at the same time. When income dropped, the debt was still there. That is when things unravel.A lot of businesses and property owners are in that same spot today. Costs went up, debt filled the gap, and now the debt is the problem. You cannot fix a debt problem with more bad debt. But you can fix it with the right structure. Most of these deals are not in foreclosure yet. They are stuck, trying to buy time.If you have a deal that does not fit your bank, is coming due, or is getting close to a decline or foreclosure, send it over. There are still ways to structure these and get them done. One call can usually tell you what options are still on the table. If you or you have a borrower that received a bank decline but the deal still makes sense, call me at 512-358-1511 and we can walk through it.No obligation. Just a conversation or get started by filling out this form! Karen Schimpf Commercial Loan Advisor 512-358-1511 karen@applycommercialloans.com www.ApplyCommercialLoans.com   P.S. We are also seeing a lot of activity in residential investment and small apartment fix and flip deals. These typically start around 70% loan to value. If you do not have a lot of experience, a seller carry of up to 20% can help bridge the gap going up to 90% CLTV. For experienced flippers with good liquidity, financing can go up to 100% of the project. The more experience you have and the stronger your liquidity, the higher the leverage options. If you have a deal you are working on, call me at 512-358-1511 and we can structure it. |
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