All Forum Posts by: Ari Hadar

Never, ever use a commercial lender. That's the general rule. Sure, there are some exceptions but here's a number of things that most people don't realize about commercial lenders:

• -RESPA doesn't apply
• -the safety measures and protections afforded by Frank-Dodd also don't apply
• -the interest rate charged is going to be higher
• -there are going to be lots of extra fees and expenses which might be illegal with a residential lender, but not with a commercial lender!!!
• -You are still personally liable. That's right, that LLC that you bought doesn't do you any good whatsoever as far as the lender is concerned. Does a global pandemic cause an economic disaster resulting in your tenants losing all of their jobs and thereby unable to pay rent? Your commercial lender doesn't care!!! So you get to pay those mortgages and if you don't, that commercial lender is going to go after your primary residence and other personal assets

So in short, using a commercial lender costs more to close on a loan, charges a higher interest rate, affords you absolutely no protections whatsoever and you're just as personally liable as you would be with a residential loan. So what is the point of using a commercial lender in the first place then?

The answer, there is no point!

Unless you were buying a commercial property like a mall or a parking lot, make the deal work with a residential loan or don't do it.

@Ari Hadar I’ve seen groups that had different levels of experience and I’ve seen groups that had seasoned investors only. The power of these groups at any level is the accountability, collaboration, networking, and growth that takes place individually.

hi @Ari Hadar


Very close to Cuyohoga Job and family services and the Zoo.  Usually when these are found it is not in nice areas Ari.

Swanny

Hello BP Family,

I was wondering if there are any other people out there in the Clarksville, TN market that would be interested in joining a mastermind group. I was involved with one of these groups in Nashville, TN and it was great learning from one another while also holding each other accountable In accomplishing our real estate investing goals.

I am thinking of having a group size of 5-8 individuals. I have not yet determined a location, however, if there is interest I will find somewhere local to meet in Clarksville. In regards to kicking this off I'm thinking the beginning of March would be perfect. 

If your interested in such a group please shoot me a PM. 

Respectfully,

Zack Caracciolo

Do a 3 to 6 block radius Google earth walk and see where these people will be walking to shop.  Is there anything you would like if you lived there.  Or? Payday loans, broken or boarded up Windows, unsavory characters, a lot of trash etc... really indicating you are  on the border or edge of the bad part.  

I would look for good things like grocery stores, Starbucks, Panera Bread or anything that you would like. 

Swanny

Passing by the property can give you a good picture of what shape the building is in. If the outside looks bad, chances are the inside will need work. If it looks promising, you can submit an offer contingent on seeing the property and making sure it's within your budget/expectations.

Great question Ari.  They are looking for a sucker.  $500 rents are terrible rents for a duplex.  Be careful!!

Swanny

I stopped inspecting the property before I offer a long time ago.  You have the steps backwards:

1 - Define the size and type of property you will be looking for.
2 - Establish a set of rehab fixes you want to do on all of your properties...with pricing.  This should give you a set rehab budget since you should be picking out rehab that you can price based on the size of number of each item.  My list boils down to:  Floors, paint walls and new kitchen.  Since the houses I would be bidding on are all about the same size, and will involve the same demo and construction, I can have a pretty tight range.
3 - Have your REA find out exactly what rehab needs to be done from the Selling Agent.  If it involves something other than what I listed above, I don't make any offer at all.
4 - MAke the offer based on the cost of rehab I just did the budget for.

5 - If the offer is rejected, I didn't waste my time visiting the site.  If the bid is accepted, I visit the sight the verify the rehab.  Remember, the Selling Agent told me what needed to be rehabbed, so as long as there isn't anything that's a big rehab and it wasn't mentioned, I buy the house.  If the house's rehab needs don't match my rehab list and budget, in other words, the property doesn't want to "play nice", then I pass on the deal...based on inspection.

Hi BP community,

I hope everyone’s having a great start of the year

Wanted to get your insights on what market will be cash flowing for either turnkey or SFR. My plan is to finance and put in 20% down, have the property managed by a property manager and I manage remotely from California. I paused on my real estate in 2020 and planning to make my moves in Q2, I'm in my recon and planning stage right now.

I also have a real estate group in FB focusing on the Cleveland market, amazing group but I also wanted to get other opinions for those who achieved some success in other areas. Thanks in advance.

What do you mmean what market will cf? Probably b, c areas will cf and no so much A areas. 

What is the wonderful FB group of Cleveland... I found one group with shaddy deals availavle...