All Forum Posts by: Andrew S.

Quick question on selection of a lender for a commercial loan and a HELOC on my primary residence. I had great success with my mortgage broker on my fixer upper house hack for my primary residence. My broker moved banks and I wanted to work with her for my next property.

Since my second deal is a commercial property, I'll have to use a commercial loan broker with this new local bank now.  This bank is offering me the best terms for my commercial loan and seems very willing to work with me. 

I'm also in the process of obtaining a HELOC on the sweat equity from my primary residence. This bank requires a full appraisal for their HELOC, while other local banks only require a 3rd party broker market evaluation. The market evaluation will cost less and be faster to obtain.

Is it worth using the same bank for my commercial loan and HELOC for simplicity? Or should I use one bank for my commercial loan and one bank for the HELOC? Not sure if a few hundred dollars difference matters in the long term.

Anyone have experience in getting more money from a HELOC with a full appraisal or a realtor/ broker market evaluation?

Thanks.

Thanks, @Taylor L.  I'll wait until a request of that kind comes then before I worry too much about it. I'll talk with my state's fair housing department.

Good morning BP,

I'm looking at purchasing a quadplex that was built after 1991 and my realtor brought up fair housing accessibility requirements to not discriminate against those with disabilities.   Walk into the front door, go up stairs to the upper 2 units and down stairs to go to the lower 2 units. There is no elevator, does the basement units classify as "ground floor units" ? Has anyone ran into a similar situation?
Could the buyer be held accountable to retroactively comply with this Act?

Federal Fair Housing Act says:

In buildings with four or more dwelling units and at least one elevator, all dwelling units and all public and common use areas are subject to the Act’s design and construction requirements. In buildings with four or more dwelling units and no elevator, all ground floor units and public and common use areas are subject to the Act’s design and construction requirements.

My research below from the Act's FAQ page says that the split level quadplex does not apply because it doesn't have a ground floor. Anyone agree?

11. Do the Act’s design and construction requirements apply to multistory townhouses in non-elevator buildings containing four or more dwelling units?

No. The Fair Housing Act applies to all ground floor dwelling units in non-elevator buildings consisting of four or more dwelling units. Multistory townhouses in non-elevator buildings are not considered ground floor dwelling units because the entire 8

dwelling unit is not on the floor that qualifies as a ground floor. Thus, if a building containing four or more dwelling units has only multistory townhouses and does not have an elevator, the Act’s design and construction requirements do not apply.

Thanks!

I submitted an offer on a 6 unit property where the current city water, garbage, and sewer bills are paid buy the owner. The monthly bill is $500 for the complex. I'm investing in a smaller town where it's all base charge and no metering or usage charges. Anyone have experience in best ways to pass this utility charge onto the tenants?

It'll be $83 per tenant which is a significant increase in their monthly bills. Some of the tenants have been there for 8 to 10 years. Current landlord hasn't raised rents in years either so it may be tough for some tenants. To me it seems fair and reasonable for them to pay utilities, but I'm biased. Current rents are 20% below market rent rates.

Thanks!

@Tim Herman I rented it first in December but it's Montana winter - not ideal moving conditions

Good morning BP, I have my first 6 month lease finishing up soon and looking for advice how others have transitioned their tenants from a termed lease to a month to month? Montana has a 30 day notice for tenants and landlords. My tenant has been great respecting the property, neighbors, and paying on time. I hope that he continues to stay renting from me. I don't really care if he wants to do a monthly or annual lease. My lease wording: Rent shall start on Date and continue to Date after which time this Lease Agreement will become a month to month agreement unless this Lease Agreement is renewed for a specified period of time. I've read multiple forum posts on BP and there seems to be a few common options: 1. Continue as normal, no special communications and let the tenant transition to a month to month lease. I think human nature tends to be generally content and not look to move out until asked. 2. Write up a lease renewal document to offer: -moving out at the end of the current lease -transition to a month to month agreement (keep current rent $725/mo) -new 1 year lease (keep current rent $725/mo) -new 6 month lease (would end in December so I'd prefer not). The current rent is in-line with market rents, possibly a little high so I don't feel the need to raise the rent after 6 months. As a previous renter, I enjoyed the freedom of a month to month lease even though I had no intention to move out. I could see how others like the security of a place to live for a year without fear of getting kicked out. Thanks! Andrew

Good afternoon BP,

I have a few friends that are looking to begin their journey into real estate and are having some of the excitement and anticipation I (and many of you) had when we became ready to start. 

If you were in a situation renting your home for $1000 / month and had enough cash to purchase a small multi-family property.

Would you continue renting and purchase a negative cash flowing property ?  Or would it be better to continue saving your income and hold off for a better deal. 

Negative cash flowing property could be a duplex with -$200 monthly cash flow (includes R&M, CapEx, Property Mgmt, Vacancy) assuming both units rented. Or the short term option to house hack and you pay $300 towards your mortgage plus R&M, CapEx, Property Mgmt, Vacancy.

My advice was to continue learning about analyzing deals, estimating rehab costs, gaining confidence with the real estate process, and paying rent.  Avoiding analysis paralysis and taking action is important but I think you want to hold off for a deal.  Curious on feedback from people who have done both options?  I held out and the deal came after 6 - 12 months of looking.

Thanks!

Hiring the work out is reasonably priced in my opinion. Look up the EPA recommendations for proper remediation methods, they're surprisingly minimal relative to industrial work

@Patrick McGowen Thanks for the feedback. My current bank HELOC option has a 10 year term that the line stays open. I'll review the fine print again and double check after this new learning! Thanks and see you around.

Good morning community,

Hope everyone is enjoying spring as much as we are in Western Montana. I'm starting to shop for HELOCs to gain access to the sweat equity in my home. Just curious if prime + 0.75% is a reasonable APR rate for my HELOC? Other details: interest only payments, balloon payment at 10 years, $75 annual free.

Thanks!

Andrew