My target properties going forward are multifamily and mobile home parks. People tend to like to live indoors. So naturally these are the most stable forms of commercial property in which to invest. I like stable investments. They tend to enable me to sleep at night.
I will structure the acquisition by either purchasing the property in an ALL CASH transaction or 50% LTV financing through a lender or owner-financing, and the remainder equity being provided by investors.
The All Cash strategy provides for all the negotiation power available in today's highly competitive commercial acquisition marketplace. It also allows the investor group to use the existing cash flow as the means of capital for renovation. After renovation has been completed, the investors can then place the correct amount of financing on the property for either short or long term holding strategies.
The 50% LTV strategy will provide for a stable investment by enabling the property to withstand a variety of market pressures and qualify for interest rate discounts provided in the commercial mortgage marketplace.