November 27, 2018
There’s little doubt that multifamily development, acquisitions and dispositions continue making headlines in major metros. Yet, secondary and tertiary markets are also in the mix, as multifamily investors and developers seek out higher yields amid less competition.
However, as Hunt Real Estate Capital Vice President Penny Bradbury points out, investing in smaller markets is not without challenges. For one thing, some smaller markets are cautious when it comes to permitting new development. Bradbury, who is based in Denver, also points out that several nuances emerge on the financing front when operating in smaller metros.
She pointed out that there are more financing options in larger cities. Additionally, “national banks are typically not familiar with the dynamics of smaller real estate markets, and the local banks may be conservative without a long-standing relationship,” she said.
Bradbury’s suggestion for operators, investors and developers in smaller markets is to examine Fannie Mae’s and Freddie Mac’s small-loan programs to fulfill capital requirements.
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