Income rental property is in high demand, but where can real estate investors and apartment building owners find the leverage to maximize their portfolios and new opportunities?
Demand for income property, especially multifamily is booming. Billionaire investor, Sam Zell’s predictions that home ownership in the U.S. could drop another 10% to barely over 50% has only added more wood to the fire. This surge has led to a significant jump in new multifamily construction. Yet, savvy property investors are still finding much of the best bargains and returns in renovating existing buildings, and upgrading assets already in their portfolios. This is especially true in well-established regions of the country around strongholds like Boston, MA.
The big question is not should maintenance be tackled fast, or whether the increased cash flow and wealth is in value-add improvements, but how to intelligently leverage capital to make repairs and complete remodels.
Fortunately, there seems to be no shortage of capital eager to get into real estate investors’ hands, even if it isn’t flowing freely from yesterday’s big banks.
It’s virtually impossible to touch on real estate finance today without mentioning crowdfunding. Hard Rock’s recent foray into this form of fundraising for its Palm Springs resort hasn’t just brought crowdfunding mainstream, but established it as one of the preferred financing tools for both sides.
On May 18th, 2014 fund giant Blackstone revealed the sale of five major Boston, MA office buildings for $2.1B. This follows on from $8.9B in office liquidations by Blackstone last year as the largest private equity real estate investor restructures to flow capital through new arms like B2RFinance for rental property owners.
Innovative commercial mortgage lenders like Rental Home Financing are going even further in rolling out aggressive loan products for investors, with some $4B in capital to funnel through to the front lines.
In the case of Rental Home Financing, new loan programs specifically for investors offer refinancing for cash out, as well as expanding portfolios of income investment property. Just hitting the market now are loan options which include Stated Income features and non-resource borrowing for foreign nationals investing in the U.S.
Multifamily apartment building investors seeking distressed and under-market opportunities can also take their pick from mini-perm loans which provide funding for acquisitions on underperforming properties until they can be turned around.
In summary, access to working capital shouldn’t be a stumbling block for rental property investors looking to maximize property value and cash flow in 2017. It’s just a matter of connecting with the right lenders.