Big Win Today: Cash Out Refinancing

[Stewart Beal]

Big win today! In June 2019 I purchased the Ridge Center in Ypsilanti, a 6 suite office building on a prominent corner E. Michigan and Ridge Road. The purchase price was $250,000 and I paid cash as it is very difficult to finance a vacant office building. We invested $30,000 into the building, leased up all 6 spaces, received an appraisal for $500,000 and executed a cash out refinance for $325,000 obtaining all of our original investment back plus $55,000. The loan is w/ Union Bank in Bowling Green, OH, 4% interest, 10 year term, 20 year amortization. I was looking for lower interest rate and more cash out and was offered 5%, 4.5%, and 4.25% from 3 banks, but no one was looking to get aggressive on office space, but 4% will do just fine. On to the next one.

[Andrew DeBlock]

Ha, I agree on the OSU dig, I'm living in it down here in Columbus!  As far as the rental license piece, I'm sure its a zoning deal.  The city only only wants to have so many rental homes in the area.  If you go on the city website, it will tell you those areas that do not allow rental licenses.  My advice would be to look for a property as close to the Grand River as you can get.  Downtown EL is where all the bars/restaurants are and it puts you closest to the university as well.  There is a ton of new building going on right on Grand River, but those come at a much higher price point to the students. Parking is also at a premium, so if you can pick up something with adequate parking that will be of value also. Go green!