Mark Allen

Multifamily Broker at Colliers | Views my own, not Colliers’ | Not investment advice | Dallas, TX |

[Mark Allen @MarkAllenMulti]

@REDevManager Ya I’m brokering the sale of a deal where the seller was burned by two buyers. I told him PSA is worthless so is their deposit. The only question that matters is can the buyer close.

[Mark Allen @MarkAllenMulti]

What are your thoughts on being 60 - 90 days into a contract with hard deposits, Buyer has equity challenges, and terminates the deal and claims bogus Seller default to recoup as much EMD as possible.

Basically, Buyer can’t close and will default, so lies to recoup risk capital.

[Mark Allen @MarkAllenMulti]

Nearly 25% of the Dallas market turned over during that period. ~90% went higher leverage floating vs fixed. Nearly 250,000 units and over 1000 properties. Fortunately in the 90s and newer space there’s plenty of liquidity to help solve for the cap stack issue. Not as lucky in pre-90.

[Mark Allen @MarkAllenMulti]

Hot take: most of the people piling on distressed sponsors right now were likely market participants in 2020-2022. Very few had the foresight of an aggressive rate hike cycle.

The fact is thousands of sponsors, operators, equity, and debt got caught up in the exuberance of 2020-2022. Private, small players to large institutional players. People and companies new to multifamily, and also with many years of experience.

@BeardyBrandon introduced more people to real estate investing than probably anyone in the last decade. Plenty of them built real wealth because of it. I’m just trying to keep some perspective.

Lessons learned for many all around.

[Mark Allen @MarkAllenMulti]

@ChadGriffiths You could literally ask THOUSANDS of sponsors/operators, PE, institutional equity, and lenders the same questions. Easy to isolate the bearded podcaster I guess?

[Mark Allen @MarkAllenMulti]

@SahilBloom Hit with a stomach bug early Monday morning and up all night. Had to take a 30-minute power nap at lunch and I had so much anxiety.

[Mark Allen @MarkAllenMulti]

@stevegarthwaite Could be on salary + commish with benefits selling title services, PropTech, med devices, etc. I can’t figure it out either.

[Mark Allen @MarkAllenMulti]

@LeylaKuni @robbiehendricks Leyla, very few have put 10 year money on deals because of that exact scenario. What will happen is that 23/24 purchase with 5-year debt result in cash in refi or forced sales and loss of equity in the sunbelt.

[Mark Allen @MarkAllenMulti]

@Stealx @BeardyBrandon @robbiehendricks I’m not sure capital for rate caps is the solution when over a 5-year period effective rents fall ~20% and perm loan rates go from 3% to 5.5%.

[Mark Allen @MarkAllenMulti]

@FlipWithNiko The best thing they could have done in hindsight was sell in 2023 or 2024. Im valuing many that refinanced with 5-yr paper during that time and their equity is still gone as values continue to decline. Their 5yr loan will mature in 28/29 and they’ll be lucky to clear debt.

[Mark Allen @MarkAllenMulti]

@SpaceCoastCRE Some put it on black in Vegas. I put it on $LUNR

[Mark Allen @MarkAllenMulti]

@TripleNetTyler @Dirtdog Best CRE video I’ve seen in a long time, hilarious! I’ve got to watch episode 1.

[Mark Allen @MarkAllenMulti]

I wish we could standardize form contracts in Texas for multifamily deals. I’m more of a handshake guy. I’d rather cut a finger off than spend 4-5 weeks negotiating a PSA on a $19M deal. I heard this is common in the northwest.

[Mark Allen @MarkAllenMulti]

Made contact with city attorney. Got release of bench order with intent to re-file and found title company to insure without indemnification. Closing in a week.

If there’s a problem, there’s a solution.

[Mark Allen @MarkAllenMulti]

Had an REO supposed to close yesterday but couldn’t get a bench order cleaned from title until code violations are cured. It’s a non-monetary lien placed by a judge pre-foreclosure.

Buyer and lender funds were all in escrow. Buyer fully aware of all violations and plans to cure. Lender won’t close though with risk of being in 2nd position or condemnation.

1) Asked Code Compliance if they could release lien, let us close and file lender lien, and then refile their lien.
2) Asked title company if we could escrow amount to cure violations.
3) Asked lender if title could make it an exception to policy, but they won’t take that risk.
4) Asked Seller if they’d hold all proceeds in escrow.

Getting a fat no on each option.

Called and e-mailed city manager and district rep to make a business case why to release and refile and let Buyer handle code violations.

I have a feeling this deal may be dead after nearly 110 days under contract and several hurdles.

[Mark Allen @MarkAllenMulti]

@CinPrivateFunds Buyer has $3.5M budgeted, but about $575k.

[Mark Allen @MarkAllenMulti]

Had an REO supposed to close yesterday but couldn’t get a bench order cleaned from title until code violations are cured. It’s a non-monetary lien placed by a judge pre-foreclosure.

Buyer and lender funds were all in escrow. Buyer fully aware of all violations and plans to cure. Lender won’t close though with risk of being in 2nd position or condemnation.

1) Asked Code Compliance if they could release lien, let us close and file lender lien, and then refile their lien.
2) Asked title company if we could escrow amount to cure violations.
3) Asked lender if title could make it an exception to policy, but they won’t take that risk.
4) Asked Seller if they’d hold all proceeds in escrow.

Getting a fat no on each option.

Called and e-mailed city manager and district rep to make a business case why to release and refile and let Buyer handle code violations.

I have a feeling this deal may be dead after nearly 110 days under contract and several hurdles.

[Mark Allen @MarkAllenMulti]

@CaseyMericle The city said if you want it released, cure the violations first.

[Mark Allen @MarkAllenMulti]

@CaseyMericle No, it’s a city lien. Government and tax liens can’t be wiped out.

[Mark Allen @MarkAllenMulti]

@FlipWithNiko Either that or the deal is postponed for months why work is completed and violations are cured

[Mark Allen @MarkAllenMulti]

@TXpaintbrush That was part of my messaging to city manager. I’ll be making a trip to their office on Monday.