All Forum Posts by: Ara Abrahamian

Thanks for the additional feedback. The 2nd floor patio is covered by the 3rd floor patio. The 3rd floor patio is covered by a fabric awning.

Is it possible the issue is from the vertical stucco wall?

We just redid the waterproofing on the deck above, but I suppose it’s always possible the job wasn’t done correctly. The roof is almost entirely ruled out because it’s a recent TPO roof with not much ponding and tight seams.

@Greg Scott thanks for the tip. We changed the windows and patio doors just a few months ago. There was damage to the subfloor above and to the header of this slider, so there’s certainly something going on around the doors. But I don’t think it’s the doors themselves. Really perplexed.

We have a 3-story apartment building and are having major water (rain) intrusion issues along the back wall of the building. Does anyone have a recommendation for a stucco inspector and/or stucco replacement contractor?

To provide a bit more context:

- the first floor is a parking garage with concrete block walls and stucco siding

- the second floor - the first habitable floor) is having significant water seep into the back wall (stick framing, stucco siding). The water damage stretches from the header above a sliding balcony door all the way down the drywall on both sides of the sliding door and even to the abutting kitchen’s drop ceiling. All-in-all, it spans ~15 feet right to left.

- Above the sliding door / balcony of this unit is another balcony for the unit above. We recently had that balcony completely resurfaced, so we shouldn’t be having any slope / waterproofing issues from the deck of that balcony.

- We’ve also inspected the roof / parapet wall, but don’t think those are the culprit because the issue presents itself on the 2nd story, not the 3rd story that’s immediately below the roof.

- Plumbing issues have been ruled out. The water only infiltrates when it’s raining.

Thanks in advance!

@Andrew Cho you can raise rents on non-RSO units but the eviction moratorium still applies regardless of RSO status.

I am designing/building a new construction, 2-story single-family house but we’ve run into an issue where the local code limitations (specifically with regard to the maximum top of plate height) are prohibiting us from doing our desired ceiling heights of 10’ on the first floor and 9’ on the second floor. The most we can do is 10’ and 8.5’ at the walls, then we can choose to vault the second floor ceiling if we want a bit more height in the 2nd story bedrooms.

My question is: since most lumber comes in 8’ or 10’ (sometimes 9’) lengths and since interior doors, closet doors, trim pieces, etc are also usually designed according to these more standard lengths, is it a really bad idea to have my 2nd story walls at 8’ 6” rather than the standard 8’?

This is going to be our own, personal forever home so we’d like to have higher ceilings if possible, but I also don’t want to do something that will make the build significantly more expensive or make the process of finding supplies even harder than it already is these days.

@Andrew Postell, thanks for weighing in and apologies for the late reply. It was a busy rush to close and been stabilizing the property the last few weeks. Agree that it’s always good to network and learn from the experience of others. That was the intent behind my original post. Unfortunately I didn’t find out about these specific terms until late in the process, so it didn’t leave much time to react. Probably should have done the networking proactively / preemptively.

The loan isn't quite how you described. It's a 10-year maturity on a 25-year armort schedule. 5 years fixed, then ARM, but the lender doesn't have the option to call the loan at the 5-year mark. Not sure what's common in other states, but this structure is essentially the standard commercial mortgage in CA. X years fixed, Y years maturity, 25-30 year amort.

I explored the govt backed 30 year fixed options, but the prepayment terms (yield maintenance) were too onerous to make them worthwhile. We plan to keep this property for 8-15 years, but I couldn’t be certain that we’d hold onto it for a full 30 years.

@Daniel Hennek, sorry for the late reply and I appreciate you weighing in. That week was really hectic with trying to negotiate these terms and closing.

We were able to get some changes to the terms you mentioned. Access to cash / distributions were permitted except if we default on the loan and we also secured the ability to sell or encumber other properties. We also got them to give on a couple other (more minor) terms.

Re: your last point (that we should have read the papers when they were first provided to us), I appreciate the tip but that was loaded with a presumption that we were given these documents early on. We were given a term sheet early on, but not the detailed 80-page loan, guarantee, collateral, etc agreements. I rec’d those around the 19th with closing scheduled by the 31st. Perhaps the lesson here is that I should have asked for those detailed docs much earlier in the process, and I’ll probably ask to do that next time I’m in a similar situation.

I'm about to close escrow on my first commercial multifamily property (>5 units) and I'm a bit surprised by some of the terms that are in my loan documents. Curious to get perspective from more seasoned investors / loan brokers about whether these are standard.

Background: The property is in California. The lender (Pacific Premier Bank) offered a rate (3.25%) that was 50 bps better than any other rate I got quoted at the time AND had favorable prepayment terms (3,2,1,1,1). Given that rates have increased, if I go back into the market for a new loan, I'm afraid I'll be looking at rates between 4.0-4.25% and will have worse prepayment terms. The borrower is an LLC that will own just this property, so the lender required that I provide a personal guarantee.

My concerns are listed below and I'm curious which of these are common for this type of loan and which ones truly are egregious and should be pushed back on.

1) My guarantee is unlimited in value. I would think it should be capped at the loan amount.

2) As guarantor, I am not only guaranteeing payment of the loan but also ALL other obligations of the LLC (such as credit card payments, other maintenance bills, etc)

3) Guarantee agreement seems to prohibit the sale or refinancing of my (the guarantor's) other assets/properties

4) The note says the lender can, after the 5 year fixed period, change the index to another index rate AND change the margin / spread to any number they choose. I still have an annual cap that limits the increase in rate within a given year to no more than 2.0%, but it seems ridiculous if they can change both the index and the margin.

5) I need to get the lender's written consent before taking distributions/dividends from the property's bank account (which is held at their bank).

...there are more, but I'll stop there for now.

If these really are as egregious as they seem to me, I'd also appreciate any suggestions on reasonable RE attorneys who are familiar with CA mortgage law and might have a reasonable shot at providing fast turnarounds on something like this. I need to fund this loan by month-end otherwise the loan approval will expire.

Thanks in advance!

Hoping you guys can help me understand a nuance regarding LLCs and 1031s.

I currently own an investment property under a single-member LLC that's treated as a disregarded entity for tax purposes (let's call it Main Street LLC). I am selling this property and using the proceeds to buy another investment property. The issue is that I am planning to buy the property under a new single-member LLC that would also be treated as a disregarded entity for tax purposes (let's call the new one Wall Street LLC).

If the ownership of Wall Street LLC and Main Street LLC are exactly the same (both 100% owned by me, the sole member), does the sheer use of two different LLCs risk triggering any tax obligations or breaching the 1031 code? Or is this fairly standard practice?

For those who are curious, my motivation for using a different LLC name is just so the LLC name is unique to the property and somewhat tangentially related to the address of the new property.

Thanks in advance!

@Jody Sperling and @Karen O. thanks for your input. I agree the monotony of all-LVP would look a bit odd. I think we'll go with tile in the kitchen/baths and LVP in the common areas w/ transition strips.