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And I don't mean renting apartments, I mean underwriting new builds, raising capital or from the construction side?
Where do you source capital? Banks? Crowdfunding? Peer2peer?
Do you do build to rent?
Not my exact job but I work in the industry (the company I work for frequently buys from developers and formerly had their own development division). I'm pretty familiar with what their side of the ledger looks like.
We've never purchased a property that was built with crowd-sourced funding and I don't believe I've ever come across one in our deal flow. They're out there, I'm sure, but very rare.
Banks and PE are the most common sources of financing. Some groups, like Related are vertically integrated: they build, own, and rent. However that's the exception, not the rule. It's much more common for developers to build, rent to end users (pretty rare to sell to an end-user), and then sell to a long-term owner (like a REIT) after they've held it for long enough to qualify for long-term capital gains.
I don't know about your side of the pond, but over here if you own the land getting a bridge for multi-tenant or flex-use development isn't a matter of difficulty but simply a matter of cost, as there are ton of guys putting money on the street for all types of commercial developments.
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"There are two novels that can change a bookish fourteen-year old's life: The Lord of the Rings and Atlas Shrugged. One is a childish fantasy that often engenders a lifelong obsession with its unbelievable heroes, leading to an emotionally stunted, socially crippled adulthood, unable to deal with the real world. The other, of course, involves orcs." John Rogers
Exactly
I've been on the wrong side of those deals twice in two years.
So if I'm paying 6-13% what's the lender getting
On development its even higher.
As always it depends on risk, term, return.... Hard money guys are still getting 11-12% + a point or two upfront. Bigger bridge guys are in the 9-10% range + a point or two. Some go much lower in exchange for equity. Every deal is different on the commercial side.
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"There are two novels that can change a bookish fourteen-year old's life: The Lord of the Rings and Atlas Shrugged. One is a childish fantasy that often engenders a lifelong obsession with its unbelievable heroes, leading to an emotionally stunted, socially crippled adulthood, unable to deal with the real world. The other, of course, involves orcs." John Rogers