Jake & Gino: Real Estate Investing & Multifamily What Financing Questions an LP needs to ask a Sponsor | How To with Gino Barbaro
Welcome to another episode of How To with Gino Barbaro! In this episode, Gino, co-founder of Jake and Gino, dives into the crucial questions every limited partner (LP) should ask a general partner (GP) or sponsor about the debt and financing of a deal. If you’re a passive investor or an active investor looking to avoid common mistakes in real estate financing, this video is a must-watch.
Timestamps:
0:00 - Introduction and Overview
1:00 - Importance of Understanding Debt and Financing
2:06 - Question 1: What is the Principal Loan and LTV?
4:00 - Changes in Loan to Value Over the Years
6:48 - Question 2: Are the Interest Rates Fixed or Adjustable?
8:24 - Impact of Rising Interest Rates
10:12 - Question 3: Is There a Prepayment Penalty?
11:10 - The Value of Assumable Loans
12:15 - Question 4: Is the Loan Recourse or Non-Recourse?
14:00 - Understanding Recourse and Non-Recourse Loans
16:00 - Importance of Alignment with Sponsorship Groups
17:30 - Common Fees and Aligning Interests
19:50 - Importance of Sponsorship Group's Skin in the Game
21:00 - Three-Step Framework for Passive Investors: The Jockey, The Saddle, The Horse
22:50 - Closing Thoughts and Contact Information
Key Highlights:
- Understanding Debt and Financing: Learn the essential questions to ask about the principal loan, LTV, interest rate terms, and prepayment penalties.
- Loan Types: Discover the differences between recourse and non-recourse loans and why it matters for your investments.
- Aligning Interests: Ensure your interests align with those of the sponsorship group, including understanding fees and the importance of skin in the game.
- Three-Step Framework: Gino’s unique framework for evaluating investments: The Jockey (sponsor), The Saddle (alignment of interests), and The Horse (the deal).
Resources and Links:
- 📚 Get a free PDF copy of our Wheelbarrow Profits book: Email gino@jakeandgino.com
- 📞 Contact us at 865-800-3905 for more information about Passive Investor Pro
- 🌐 Visit Jake and Gino for more resources on real estate investing
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About Jake & Gino: Jake & Gino are multifamily investors, operators, and owners who have created a vertically integrated real estate company. They control over $350M in assets under management. Connect with Jake & Gino here --> https://jakeandgino.com.
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