Multi Family Investing for Beginners

This short video will be focused on explaining Real Estate Investors, Syndicates, Acquisition Firms and Large Financial Institution

This real life scenario goes over a multifamily investor using a strategy known as 90/10. With a process such as this we are able to see what a multifamily purchase will look like from an investor standpoint.

This video gives an early look into one of the strategies used to fund Multi Family project. My experience as a commercial lender allows me to share a way that most lenders do not want to for a new investor to use to be able to purchase their first multifamily property.

This video is an introduction to the capital stack and its importance. Knowing the capital stack is the most crucial information needed to move the deal thru to closing. 

Understanding senior debt is extremely important in purchasing your first real estate multifamily deal. The senior debt lender allows everyone else in the capital stack to also get an idea of how the profits will be paid out and how much each person will make.

Mezz debt is also a huge help for a borrower who doesn’t have all the funds for a down payment and it can allow a person buy their first deal with as little as 10% - 15% down. According to Wikipedia Mezz debt is defined as - any subordinated debt or (preferred equity) instrument that represents a claim on a company's assets which is senior only to that of the common shares. Mezzanine financings can be structured either as debt or preferred stock.

Most investors who purchase multifamily with very little of their own capital included in the deal use Pref Equity as that happy medium to help them with their down payment. Granted this also means giving away a portion of the equity you will keep for yourself but for a person without a lot of money to put into a deal using Preferred equity is a great way to buy your first multi family deal and put down little of your money in the process.

Common equity on the capital stack is best defined as the down payment, closing cost or any capital infusion that the investor puts in the project for a return.