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It’s a new year and change is in the air. With financial regulation changes sure to come and the recently announced Federal interest rate increases, it’s no wonder mortgage banking and real estate lending is hot on investors’ minds.

This episode, we have Livingston Hessam, who just returned from this year’s Mortgage Bankers Association Commercial Real Estate Finance and Multifamily Housing Convention & Expo.

Listeners will remember Livingston from episode 70, in which he gave us a recap on multifamily mortgage banking and real estate lending from the 2016 conference. Livingston is Vice President of Walker & Dunlop‘s Tampa office. Livingston brings over 12 years of experience in real estate lending and finance solutions to Walker & Dunlop, which just celebrated it’s 80th anniversary.

Livingston offers up a recap of the 2017 CREF/Multifamily MBA Conference and discusses key themes from the past year and the current state of mortgage banking and real estate lending.

What’s In Store for Mortgage Banking and Lending

Agency Annual Caps

• Fannie Mae & Freddie Mac each allocated $36.5 billion for 2017 (same as 2016)
• Certain loans and portions of loans are excluded from the cap (i.e. affordable and green/energy efficient)
• Fannie Mae & Freddie Mac multifamily production totaled over $110 billion in 2016.
• Fannie up 30%, Freddie up 20% from 2015
• Expected to capture 40% of total multifamily volume for 2017 ($50-55 billion each)

Commercial Mortgage-Backed Securities (CMBS Loans)

• Risk-retention regulations put in place in 2016, narrowing amount of CMBS lenders
• Post-election stability, but more selective lending market
• CMBS lenders ramping up bridge-lending

10-year Spreads

• Life-insurance (50% leverage and under): 125-135 range
• CMBS (75% leverage): 250-280 range
• Agency (80% leverage): Low 200s range
• Federal interest rate sees .25% increase
• Expected to increase to 2.75-3% by end of year

Hot Topics

• Trump Administration
  • Tax reforms
  • Dodd-Frank roll-backs
• Retail lending
  • Publix most active retail buyer in FL
  • Grocery chains are buying out plazas after lease terms or taking right of first refusal on new lease terms
  • Reduced supply of grocery-anchored retail
  • Strong retail appetite for real estate lenders

Investor Resources

• In addition to his V.P. role at Walker & Dunlop, Livingston is President of the Society of Real Estate Professionals (SOREP). Formerly the Tampa chapter of University of Florida’s Bergstrom Council, SOREP hosts networking events and seminars to professionals and gives back to Florida universities. SOREP focuses on all aspects of the real estate industry and is open to all. Click here for more info.
• Walker & Dunlop offers comprehensive real estate financial solutions for all income-producing properties. For more info, visit Walker & Dunlop website.
• To contact Livingston directly, click here.

The post Ep. 122 Livingston Hessam: What You Need to Know About the State of Mortgage Banking and Real Estate Lending appeared first on Real Estate Investing in Florida.

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The coming year is looking to be an eventful period for mortgages and financial lending in real estate. Debt markets are poised to undergo significant changes over the following years amidst regulatory changes and geo-political headwinds. Investors, both seasoned and novice, should be aware of the changes and the effects they could have on current and future mortgages.

Livingston Hessam, Vice President of financial solutions firm Walker & Dunlop and financing expert, discusses these changes in the debt markets and what investors need to know about their impacts on mortgages and other debt-equity options.

• 2016 Mortgage Bankers Association Conference
  • Annual conference gauges financing market for coming year
  • Mixed outlook for 2016
  • Multi-family holds strongest appetite for lenders
• Debt Categories
  1. Agency Debt – Fannie Mae / Freddie Mac
     1. Conventional rates, senior housing, student housing, manufactured housing
     2. High-leverage, non-recourse, cap limits
     3. Reached 2015 cap before end of year
     4. Introducing smaller deal offerings ($1-5 million) – lower upfront closing costs, for typically novice borrowers, not included in annual cap limit, do not require same level of eligibility requirements
     5. Only can acquired through authorized servicers/lenders
  2. CMBS Markets (Commercial Mortgage-Backed Securities) – Loans sold by banks into secondary markets
     1. Amid current CMBS 10 year maturity loans wave
     2. Several regulations coming into effect causing uncertainty: Risk Retention (Dec. 2016) – Req. CMBS issuers to hold 5% of loan to securitize deal
     3. Investors and lenders advised to close deals in first half of year
  3. Life-Insurance Company Loans
     1. Typical deal – sub-70% leverage, non-recourse, strong exp. sponsor, well stabilized market
     2. Positive lending outlook for 2016
  4. Conventional Lending (Banks)
     1. Regulatory changes: Dodd-Frank Act
  5. Alt. Lending
     1. Walker & Dunlop offers bridge-lending packages
     2. Good for investors with assets not ready for perm. agency lending
     3. Up to 80% of cost for pre-stabilized deal or value-add deal, up to 36 months, help re-sell or re-finance
     4. For multi-family, student housing, manufactured housing, independent & assisted living, and skilled nursing

Livingston kindly provided us with a detailed, corporate overview package for Walker & Dunlop, further describing the financial solutions they offer as well as contact information.

Corporate Overview 2.22.16

The post Ep. 70 Livingston Hessam: You Will Want to Hear What Is Happening With Mortgages! appeared first on Real Estate Investing in Florida.

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Successful investing needs capital. For real estate investors, that often means mortgaging existing properties as a source of attaining capital. Traditional lending through banks and other financial institutions is often the method of acquiring hard-money loans. Sometimes though, the loan approval process may be too time-consuming or their lending practices may be too restrictive for investors.

Keyur Patel (top, left) and Naim Hamdar (top, right) of Synergistic Funding share three types of creative mortgages that are available to real estate investors as an alternative to traditional institutional lending.

1. Commercial Mortgage-Backed Securities – CMBS Loans
   • Currently strong alternative loan product
   • Cyclical nature – this type of loan dissipates with market downturn
   • Undisclosed, non-restrictive cash-out feature
   • Assumable
   • Non-recourse
   • Quick execution – loan sold as packaged, traded security or bond
   • Competitive Interest Rates compared w/ institutional lending (< 8%)
2. Bridge Financing
   • Often used as alternative loan for investors making balloon payments on existing mortgage and institution not offering re-financing options
   • Up to 65% loan-to-value
   • Typical terms – 1-3 yrs. w/ balloon
   • Interest rates between 8-12%
   • Quick-closing
   • Non-Recourse
   • Creative underwriting – “carve-outs” prevent loan being taken out with malicious intent
   • No minimum for financing, but $100 million ceiling
3. Line of Credit
   • Designed for seasoned investors w/ multiple projects per year
   • Private lines of credit offered to investors
   • Available for entire term (1yr)
   • No annual fees if not used
   • Once used, 1% monthly fee applied + 9-month repayment term
   • Quick-closing
   • Relatively quick approval turnover (1-3 weeks)
     • Investors must have at least 2 successful closings per year
     • 1 yr. tax returns
     • 3 months bank statements

For more questions on these types of creative mortgages for real estate investing or to find out about other services Keyur and Naim offer:

Call Synergistic Funding – 813-333-5128

or email them at info@synergisticfunding.com

The post Ep. 50 – Three Types of Creative Mortgages for Real Estate Investors appeared first on Real Estate Investing in Florida.