The Multi-Family Muse: vol. 003

THE GREAT WALL OF MULTI-FAMILY

$4B In October Alone

Hello fellow investors, friends and real estate enthusiasts!

Is it really July!???As we discussed last month we are all glad to see the first half of 2023 over and excited for the opportunities that lie ahead. With interest rates higher than in recent memory, many current borrowers face a distasteful choice: sell their properties soon, or try to refinance and be forced to bring more cash to the table to avoid default or foreclosure.

In October alone, well over $4B in commercial mortgage-backed securities loans associated with multifamily properties will come due, and November's total will be nearly $4B, according to CoStar data. Few are predicting interest rates will decline any this year.

Refinancing might not be possible but even when it is doable, owners looking to refi their short-term debt will need to bring 15% to 50% of original equity contribution, depending on net operating income growth and market.

Ironically, the wall is coming at a time when demand for apartments is still strong and rents, while leveling off or coming down in some markets, are still historically high.??This financial quagmire makes it a ripe time to invest.??See more below.

RESCUE CAPITAL

Opportunity in Hard Times

Rescue Capital is a capital injection into a currently operating property.??Many of these assets are fundamentally sound, with cash flowing and some meat on the bone left for investors.

The current owners are essentially selling off a piece of its profits to the new equity investors,??which then steps ahead in line to get paid first.

For the rescue provider, the preferred equity position offers a mix of two things...

1. Security: You’re going to have the certainty of debt.
2. Upside: You’re going to get all the benefits of equity.

Hard times make for hard choices and opportunistic strategies. The rescue capital approach will be increasingly adopted in the current challenging environment for real estate ownership and investment.

i65Capital Investments is actively in discussions with current multifamily owner/operators and FUND managers to help bridge the gap to bring equity into deals that are fundamentally sound.

Martinis, Merlot & Multi-Family

Online Investor Party

In June we kicked off a new online webinar series called

"Martinis, Merlot & Multi-Family".??It's a live online investor party where new and seasoned investors alike come to casually learn more about investing in apartments. This series will be happening every third Thursday of the month from 7pm-7:30pm CST.

So grab your favorite cocktail and join us this month on July 20th!

A Zoom link invite will be sent out soon for you to RSVP.

Guaranteed Fun...Guaranteed Rockin' Good Time!

Until next time...Happy Investing.

Brent Barcus

i65Capital Investments