Dylan Marma and Mike Taravella interview Rand Capital’s Nick Chapman to discuss the financing cash flow levers to maximize cash flow with agency debt.
- Interest Only
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- Allows for more velocity on your capital to hit IRR targets and preferred returns
- You leverage the interest-only period to reinvest into the property in the form of capital expenditures (Capex)
- Case Study
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- Loan: $3M Loan
- Interest Rate: 4.25%
- Cash Flow Savings of $50,000
- Longer Amortization Period
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- Longer amortizations allow for more favorable Debt Coverage Ratios
- Case Study
-
- Loan: $3M Loan
- Interest Rate: 4.25%
- Amortization: 30 years
- Cash Flow Savings of $18,000
- Higher Leverage
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- Share the upside with investors by having your lender take on the risk
- Investors can still have capital to invest in other deals
- “Let your lender be your biggest partner” - Nick Chapman\
- Expert Tip of the Day: When refinancing out of bridge debt, if you are doing a rate and term refinance you can go up to 80%, if you are doing a cash out refinance you can go up to 75%.
Contact Information:
Nick Chapman’s Email
Rand Capital Website
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About Jake & Gino: Jake & Gino are multifamily investors, operators, and owners who have created a vertically integrated real estate company. They control over $350M in assets under management. Connect with Jake & Gino here --> https://jakeandgino.com.
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