I got contacted by Arbor's in house recruiter about joining their new SFR product. Anybody here familiar with Arbor's SFR product? I am not too excited by it as I dont think they can match or beat my current pay (CMBS originations & securitization) and it looks like it would be essentially SBL lending? Any feedback/opinions? Thank you.
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Arbor is a huge SBL lender. I would avoid that product type/lenders that primarily do SBL as its hard to stay profitable in that line of business. And I would imagine its even harder to stay profitable in SFR.
can you even explain why SBL is not profitable? you can't...
Well, its more especially not profitable for Freddie Mac than the sellers/banks they work with. I think its a flawed business model to intentionally restrict the loan amounts to a specific threshold (
Arbor and similar lenders feed off servicing fees. With larger loans, you're getting a 30-60bps servicing fee on top of the origination fee and whatever premium the deal trades at (normally Fannie thing).
With SBL it is definitely harder because the costs and time/effort are practically the same as a $20MM loan but you also have more hair and smaller mom/pop borrowers.
In order to SBL to be profitable, you need streamline processes and use of the minimal amount of resources. So the true key to increasing profitability is volume while keeping the costs low. Can you scale without having extra expenses?
SFR SBL two different things guys
SFR lender is like CoreVest or B2R (owned by blackstone). Dont confuse them with SFR operator like invitation homes
What could the exit opps be for a role like that? How transferable would the skillset be to like agency multifamily capital?
All I know is SFR is quite different from commercial real estate.
Corevest has done several SFR securitization, go read their term sheets, you will see information like FICO scores and a lot metrics unique to SFR lending
I would not say SFR is significantly different from multifamily. Remember, the tenants are not on long-term leases so their FICO isn't that relevant because during the 3-5 year term of the loan there very likely will be at least one lease turnover. The long term sustainable cash flow will follow multifamily market dynamics. The one part of underwriting that is different would be the operating costs as single family homes are definitely more costly for R&M on a per unit basis.
Can someone reply to this comment please? App test
Can someone reply to this comment please? App test
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