All Forum Posts by: Eric Black

Hi all. We have several properties in the Indianapolis area in a series LLC. Some have loans, some are free and clear. Are there any lenders who will either do a HELOC on a single property, or a portfolio HELOC or cash out refi, with them in the LLC?

Thanks!

Thanks Shannon!

Does anyone have a recommendation for an electrician in the Wichita/Maize KS area? Looking to have a 30 or 50 amp outlet installed. Thanks!

Happy Sunday all. Checking to see who here lives/invests in York, PA. If you are and would be willing to chat for a few minutes please reply or PM me. Thank you.

Eric

Hi Anthony,

You're right, that's a difficult question to answer because a lot is going to depend on the final buyer. In simple terms, I think you are going to need to reduce the price of the house close to what it will cost to change the layout. Therein lies the challenge. For you, the layout may just be a little off and you could make $10k in changes to make it the layout you want. I on the other hand may need to spend $30k to make it the way I want. And we would both be right. :) My advice would be to start lowering the price maybe $5k at a time (or however much you are comfortable with) until you find the buyer that's willing to pay what you're asking and still have money to make the changes they need to make. 

Hi Anthony,

Unfortunately the answer is not going to be what you want to hear. Houses that don't sell typically because they are priced too high. The number of views on Zillow has no bearing on if your house is priced correctly. That only indicates it is in the price range of a lot of buyers. Your prospective buyers have given you the answer, they don't like the layout. Paying to have the house staged just makes a house with a bad layout look nice. It's hard to get an idea of the layout of a house from the pictures on a website so until they actually see it they can't get a feel for the layout. This may explain the high number of showings with no activity. 

Even if all of the rehab has been done and the house looks great, if the layout is bad, a buyer is going to have to invest significant money to knock down walls and change the layout to something they want. If they're buying the house at market value for a property with a good layout, then having to spend an additional $10-20k to change the layout makes it an above market deal.

I'm not trying to be a downer or rain on your parade, but the reality is, if a house has been on the market and has had a lot of showing and no offers, that means it's priced too high.

Eric

Hi David,

One challenge is, most conventional lenders will not lend to an LLC for a single family property. I'm not saying it can't be done but it may be difficult to find a bank that will allow it. And if you buy the property in your name and get financing in your name and then deed the property over to your LLC after closing: a) the bank may be able to call the loan due. Not saying they will, but they could or, b) your insurance company may cancel your policy because they probably won't want to have the policy under your name but the property deeded to your LLC.

As for the DTI, having rentals will actually help you, just possibly not at first. It used to be that you had to have been a landlord for 2 years before lenders would count the income from your rentals as your income toward your DTI. I've heard that has changed but can't confirm that, you will need to talk to different lenders to see what their guidelines are. When the income can be counted they'll typically use 75% of rents as income. So if you have a property that rents for $1,000/month they'll credit you with $750/month toward your income. Again, different lenders may have different guidelines but that has been typical for many lenders in the recent past.

Hope that helps at least a little.

Eric

Preface: I am asking this question in all seriousness. I understand there are a lot of unknowns right now with the Corona Virus and the global economy. I am not looking for speculation or snarky comments about how there are a lot of unknowns right now and how things may be different tomorrow, I understand that. This isn't to start a political debate either so please keep your political opinions to yourself, regardless of party. So please don't reply if you can't answer the question directly. Thank you. :)

Are there any lenders out there doing blanket/portfolio loans? We have 4 SFR properties with financing that we are considering looking into getting a "blanket loan" for, if possible, since rates are lower and mostly just to simplify. Our current rates are good in the grand scheme of things (low 4's to mid-5's). If you, or someone you can refer me to is please respond or PM me. Again, we know in the current state of the global economy this may not be an option, but if it is now, or when we someday climb our way out of all of this we'd still like to consider it.

Thanks for any recommendations.

Cheers!

Eric

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We'll be there!

Happy Monday! We will be holding our monthly meetup tomorrow, August 20th, at 5:00 PM at Figueroa Mountain Brewery in Santa Maria. We usually have networking for the first 15-30 minutes so if you can't get there right at 5:00, don't sweat it. This is an informal group with no sales pitches, no coaching programs, just a venue for investors to get together and share ideas and knowledge. We have everyone from newbies who are still looking for their first deal to investors who own multiple properties and everything in between. If you are looking to learn about wholesaling, this probably isn't your group. There are already plenty of groups in the area covering that topic (and gurus selling expensive programs). 

We meet in the back room near the restrooms. Please RSVP in the comments or PM me if you aren't already on our mailing list and plan on attending so we can have an idea of how many people to expect. 

Look forward to meeting any new attendees!

Cheers!