All Forum Posts by: Dewain J.

@Jason D. - American Heritage. I've really enjoyed my experience with PFCU though. Who are you using for your deals? 

@Melvin List I've definitely been pushing back on it, but not sure how far I'll get. I think it's ridiculous. I had other projects I'm working on, but I won't be refinancing through them, due to what I feel is a really short sighted situation. 

I recently start doing business with a new bank. I had two properties finishing up at the same time, so I did two loans with them in the course of a month. A few things transpired that I found frustrating because they hadn't happened at previous banks I worked with. 

First, I applied for the loan with what I felt the ARV would be based off comps. But I guess we did much better work with the property, and the appraisal came back higher. So they approved the loan, but I told them I wanted to increase the loan based on the new ARV. I was given push back as to why I would want to do that. I trudged through and explained it didn't make sense for me to leave equity in the property since I'm currently looking to aggressively acquire properties.

The second property came in a little higher, not a crazy amount, but again I requested to the maximize the loan amount. Again resistance. But they approved it with a contingency that there would be a $15,000 hold on the funds. That money I could not take out or use without approval of the CLO, when I went to purchase my next investment property. Their concern being I would just take the money and buy a tesla or something. 

Fast forward and I'm closing on my next deal Friday, and they are only releasing 10k out of the 15k. I was told that $5k would be held for the life of the loan. It's not the end of the world, but am I unreasonable for thinking this is wrong, considering I'm paying interest on that $5k,  that I will never have access to? Is this normal practice by banks, and I've just been lucky not coming across this before?

@Jeff Bridges thanks for the thorough reply. I like that approach and will definitely be using that going forward! 

As I'm walking through properties I'm potentially going to by, are there any tell tale ways to determine the condition systems (house heater, water heater, electric, etc.) just by eyeballing them? 

I know if I see knob and tube or a dated looking service that I'll likely need to update the electric, but what about the heaters? 

@Account Closed

No it doesn't, not for us anyway. Only one side of the fence is on our property. We don't actually have a fence that encloses our yard. 

@Davido Davido

Thanks for all the very thorough and detailed advice. I agree that getting a lawyer involved might be ideal, but when it comes down to it, just doesn't make fiscal sense in this scenario, because of the cost of the fence. By the time I got down doing surveys and getting lawyers involved, I could just pay to relocate his fence. His fence was $3800. 

I don't think the adverse possession should be an issue, although it is great to be aware of that, because the fence is new. It's not even a year old and has been a point of contention since it was put in place. The previous that was there has been gone for a while and we agreed on a compensation amount to him when we took it down. 

I'm leaning towards going the route of explaining to him again the issues at hand and allowing him to make arrangements to move it over onto his property, and if that doesn't work involving the municipalities to make the decision for us. I like that approach. 

@James Enright and @Matthew Anderson

I don't have any doubt that the fence is on my property. Doesn't seem like we are going to come to any agreement we've been going back and forth for some time. Our thought was that if someone has something on your property, you have the right to remove it. Especially since it was unapproved by us, and the proper permits weren't pulled to perform the work. 

Sounds like you are heavily banking on appreciation. As a rule, you shouldn't be banking on appreciation over the long turn. That's just icing on the cake if you get it, but not guaranteed. What happens if you don't get the appreciation you are expecting? Just a really risky deal with so little upside there. 

If you are investing out of state, there aren't any better buys within that 6 mile radius? Would hate for your first deal to put you out the game because it wasn't analyzed properly. 

Key points here: 

• Buy Right, Buy Right, Buy Right
• Make sure you have good cash flow on your properties. 
• If you're doing it right, sure your debt level is increasing but your debt to income ratio should remain the same or improve if you are getting good cash flow. 

I think it also depends on what you are trying to do. If you are keeping the money in the business and constantly reinvesting, you could take out more money to keep investing. If you are planning to live off the money, you may not want to pull all of the equity you possibly can out. But even that is just a matter of your risk tolerance. I prefer to take all of it out right now, because I want all the capital I can possibly have to keep making purchases. But cash flow is king.