The Real Estate Syndication Show WS1522: Understanding HUD Loans | Tom Burns
What is a Housing and Urban Development or HUD loan? How do you use them to move your multifamily deal forward? What are the pros and cons of it? Should you consider getting one? All these questions will be answered by our guest today, entrepreneur, retired orthopedic surgeon, and author, Tom Burns of Presario Venture.
In the last episode of our three-part series with Tom, he discusses what a HUD loan is, how long it takes to have one, how it can be assumable, as well as the considerations you need to have before getting it the first time. He also discusses how he is finding new investors right now by networking with a lot of people, the metrics he tracks personally and professionally, the how he gives back. Tune in now and learn about HUD loans today!
Key Points From This Episode:
- Tom defines what a HUD loan is.
- What are the benefits of getting a HUD loan specifically for multifamily?
- How long does it get to have your HUD loan approved?
- What to expect when getting a HUD loan?
- Tom says that most of class-A properties in the US were financed using a HUD loan.
- Tom elaborates how you can go from conventional to HUD loan.
- Tom shares that because of the current speed of the market, they started to utilize more insurance companies and agency debt.
- Is HUD loan something you should be pushing from the start?
- What would have Tom done differently knowing what he knows now in the real estate space?
- Tom’s best source for meeting new investors right now.
- Tom talks about the challenge he is facing in his business.
- What are the most important metrics that Tom tracks?
- What’s the number one thing that contributed to Tom’s success?
- How does Tom like to give back?
Tweetables:
“These are agency backed loans, they are very long-term and they are fixed. So on the good side, if you develop a multifamily property and get a HUD loan, it's 40 years of fixed rate interest, and 40-year amortization. And, if you go from 20, to 25, to 30, to 40, that type of amortization really increases cash flow.”
“It (HUD loan) takes time. There are multiple meetings and you have to invest significant money into your architecture, engineering, and civil, to get it to a point where HUD will actually officially give you the loan.”
“HUD will do their own research. They'll make sure that we've got a feasibility study. They'll make su
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