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Nov 20, 2022Liked by Jonah Richard

Recommendations:

1. See if the DSCR pencils with a 30 year amortization with at 10 year lock (most lenders won't go longer than 10 year lock on the interest rate, but some do and if so, explore those options). That may be enough. If not

2. Infuse equity capital: This can be done using the additional equity capital to pay points (interest up front) to buy down the rate.

3. Once the above are in place, breathe a sigh of relief, manage your development superbly, and if an when interest rate environment is better, refinance taking into consideration any prepayment penalties on the mortgage loan (preferably negotiate a loan without any such penalties).

4. Hold long term.

Best wishes.

Mark Preston

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As my late father said

“These deals are not easy to put together.”

As a consequence, he was a long term investor. He rarely sold, only doing so if absolutely necessary.

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