Aug 23, 2021
Today we talk with Ken Avalos, VP of Electra Capital, about
alternative lending with a focus on multifamily financing
solutions. Alternative lending is a great option when traditional
lenders are unable to meet an investor's needs. The benefit of
an alternate loan is more leverage (which means you put in less
capital), speed, and the flexibility and creativity to work around
odd structures and difficult issues. Depending on your situation,
this can potentially allow you a greater rate of return.
Most investors use traditional lenders like Fannie and
Freddie, or use a traditional community bank - all of which
typically offers low cost and long term fixed rate financing.
However, these traditional lenders will usually at best give you
65%-70% leverage, and their underwriting criteria is fairly strict.
And in today's world of 3%-5% cap rates, it's hard to generate a
decent internal rate of return.
Key Discussion Points
[00:57] Opening remarks by Eric Odum & Steven
Silverman
[03:31] About our guest: Ken Avalos
[04:56] How did you get into real estate and
finance?
[09:35] Do you think the Florida market is
overheated?
[14:50] Are you monitoring the rent to household income,
and what are you seeing?
[17:13] Explain about your alternative financing
services
[26:14] Does the bridge loan convert into a permant loan
at the end of 3 years?
[27:44] What deal size is attractive for your loan
service?
[28:42] Do you mainly loan to multifamily? Or do you also
look at other asset classes?
[30:03] Tell us about Mezzanine Debt vs. Preferred Equity
as it relates to your product
[42:09] How can folks reach you?
[43:20] Closing comments by Eric & Steven
About Our Guest
Ken Avalos is the VP of underwriting and analysis at Electra
Capital. He is a graduate of Boston college, and has an M.B.A. from
the Stern School of business.