All Forum Posts by: Benjamin Aaker

I sure do:

Take some extra time to interview commercial lenders in the area you plan to invest. There is so much variability in knowledge and experience and a great banker will help you out immensely.

Start putting together a personal financial statement and a debt schedule if you haven't done those already. You will also need 3 years of prior tax returns.

Form an LLC specifically for your commercial investing.

Hold on to your current properties rather than selling. Banks want to see consistency. That doesn't mean never sell; if the price is right, go ahead.

Interview insurance agents and find one experienced in the commercial area. This can save you a bunch of time later when you are in a hurry.

Get to know a good commercial real estate agent.

Of course, there are many more, but these are the top ones on my mind. PM me if you want to talk further. I have nothing to sell. I just like teaching.

Sounds like you have your numbers figured out. Good luck with the offer!

Hi @Justin Griffith, looks like I'm a little late to welcome you to BP. How have the last 6 months been for your investing?

I totally agree with @Andrew S.. Go with the 4 unit. If you are going to live in a unit, you won't have trouble paying the down payment. If not, you might put up to 30% down along with whatever work needs to be done, which looks like you should be able to swing. Getting that multifamily experience early will start you off. This is coming from a multifamily investor who started in the single family realm. 

Repair of $5k on the fourth unit probably means similar on the other three when tenants move out. I agree with @Craig Anderson and @Rob Lee. The neighborhood sounds risky. Collecting rent will be a headache. Filling units with quality tenants will be as well. You might find yourself compromising to get tenants in. Unless you have experience investing in this area, I'd give it a pass. Or maybe find a partner who does have this kind of experience. 

Hi @Dan Moe I am going through this very issue right now, looking for a vacation rental in Florida. I've talked with about 10 bankers and everybody is excited to hear from the investor until you start talking about a commercial loan. Then it becomes very difficult. If the sale property of your 1031 was in your name then you should be able to get a residential loan if you plan to use the vacation rental for yourself part of the time. If it was in a corporation, you'll need to get a commercial loan.

I talked with 2 bankers, each eager to get my information. Both thought I didn't understand the difference between a residential and commercial loan when I clearly said "I need a commercial loan." They proceeded to get all my info and happily quote low rates for a residential loan. When I connected them with my 1031 exchange suddenly it was "We don't do those kind of loans." Hope my story saves you some time. 

I recommend Quickbooks. It's a pain to learn and too big for what you have right now, but you're planning to scale, right? Learn it now so you don't have to migrate later. I used spreadsheeting for three years and it was madness to switch to Quickbooks. Better yet, consider hiring a bookkeeper.

To add to @Cole Simpson, it's very difficult to find a municipality that will allow a new mobile home park any more. You are talking about developing bare land so you need to do a lot of research to find out the cost of developing in your area. It might not be much to build a duplex but getting utilities out to the site can get astronomical. If you do the research and can wait a while for the payoff, developing can be very profitable. 

Hi Issac and welcome. I wish I would have done more research on the cost of rehab. My first flip I lost $8,000. I just kept discovering repairs I hadn't budgeted for. Glad to see you are reading. I wish I had done more before that first flip. It's been nothing but awesome after though so keep going.

Hi Michelle and Floridians, I've been looking at Pinellas County for a while. I'm just looking for commercial loans and that is difficult. Since you are house hacking it'll be a lot easier. I love the location and am looking forward to my first purchase down there as well. Good luck!