All Forum Posts by: Adam Craig

Anyone complete any commercial refinance deals lately?

I have a 6 unit office building that I purchased in October 2019. It was rehabbed and fully leased by May 2020. Of course by this time Covid was here so my refinance plan hit a wall. 

Purchase price 275 - Rehab 65K - Bringing in 5100/month before building expenses with annual NOI about 45K.

I shopped refinancing on my own and with a commercial broker but didn't have much luck getting it financed above the original purchase price of 275K. I am trying to get closer to 320K so I can pull most of my rehab investment back out. Banks seem VERY cautious of commercial, specifically office space for obvious reasons.

At this point I am thinking of waiting until 2021 because my tax returns will be stronger and the building will have better seasoning.

Interested to hear about what other commercial investors are experiencing? 

The bank actually relisted the house on xome and I won it for the same price just closed last week...

We found some wood at Lowe's and we bought almost all of it on the shelf. You're right there is a massive shortage

As I am reading your post I am order from Bestbuy which I have never done in the past. Home Depot and Lowes were out of stock of the entry level stainless appliances we use in rentals and flips. Never ordered from Best Buy but they are showing me a 7 day delivery in my cart. Hope it checks out.

I used to pay through the nose for income tax on my internet retail business - lots of revenue and really only COGS to offset it the income. Fast forward 9 years, I have a 30+ rental portfolio that used BRRRR on so big tax expenses. For a few years I was never able to apply the real estate losses to my internet business so they were "suspended" until I sold the property. Since then my wife got her real estate licence and is deemed a "real esate professional" for IRS rules. So we can now take those losses and apply them to the internet business and her real estate commissions. You combine this with large IRA and HSA and health care premiums and my tax payment is a fraction of what it once was.

This is great for tax but now we are ready to buy a new home and even though we have strong cash flow, excellent reserves/credit - tax returns are not showing the profit. 

Anyone else have this issue?

We typically don't have any previous inspection reports we nromally buy houses as is sometimes and more times than not lately without even seeing them. 

 Its hard to say - a broad range of things but essentially not disclosure issues and wanting things fixed that they didnt ask for after their first inspection. Nearly all of the items they brought up were items they chose not to fix on their initial inspection that they are now have an issue with.

Still a pending case but a couple lessons I have learned along the way...

1. Disclose, disclose, disclose - Most times we dont know every issue in these houses I am only in them for 30min before we buy if at all! so now we are just attaching the city point of sale inspection to our disclosure form so they know all the work we are doing. At least write some verbiage that says the house may have had issues to cover your butt.

2. People can sue for anything and they do. You can do everything right and they can still sue you and you will be liable for legal fees at minimum. I watched a documentary called "the patent scam" - these poor mid-large companies are dealing with cut throat attorneys that know how to work the system causing them to pay millions in legal fees or settle. Most are forced into settling or go bankrupt fighting and did nothing. Its an imperfect system, be as safe as you can.

I use 2 different shades of grey on every house I can. I just had a hard time picturing it on this house?

Looking for exterior paint ideas. Was thinking about staying white because its safe and I am having a hard time figuring out paint with the roof and stone.

Please no landscaping or other suggestions - we are on it!