All Forum Posts by: Bill Sargeson

@Bryan L. That is a great suggestion! I didn't think about rolling the closing costs into the loan....quick math indicates it would only add about $30 to the payment and I get to keep my capital and increase my cash flow. I bet the bank would do it, thank you very much for the tip!

@Frank M. Yes the ballon is to reset the loan for another 5 year term. I did realize that stretching out the loan will cost more in interest in the long run, but I guess I was thinking that the tenants would be paying this and I might be able to gain a substantial increase in cash flow....just trying to figure out if it's worth it or not.....

I currently have 7 properties with individual commercial loans on them totaling $192k. They are all 1-2 years into the loans.

5.5% variable

10 year amortization

5 year balloons.

I have been speaking with another local bank who offered to consolidate all the loans into one loan amortized over 15 years, 5% fixed 5 year balloons. Doing so would increase my cash flow by $700/month which of course to me sounded great! A real estate attorney said he would charge me between $1000-$1500 for his fee, plus I would assume I would have to pay for title insurance again(which totaled $1034 on these 7 properties) plus have to pay a 1% origination fee of $1920. I am guessing total closing costs around $4500-$5000. With the increase in cash flow it would take me around 7 months to get my money back.

My questions are:

Has anyone out there consolidated loans like this before?

Is it possible to ask for a discount on the title insurance(7 properties at one time)?

Obviously the downside is the out of pocket expense for closing costs and the properties not being paid off for 15 years vs 10 years. The bank also said that if I wanted to sell a property they would break it off and modify the loan(not sure how they figure that, I need to ask some clarifying questions). I really would like to hear your opinions on this!

Thanks!

-Bill

I noticed on your spreadsheet the building was constructed in 1900. I would definitely get the electrical and plumbing systems checked out.

I have a credit line on one of my rentals that I use for down payments on purchases for new properties. I then pay it back with my cash flows and repeat the process...works like a charm....and the credit line and the mortgages for my rentals are with the same bank. So if I understand your question yes you can do this.

Is it currently rented or vacant? I don't understand why the owner wouldn't furnish the rent rolls so you can at least verify the rental income(at least on paper). I am getting ready to close on a rented out duplex and when I went to view it I just asked the tenants how much are you paying in rent(I wanted to make sure it matched what the seller furnished). They didn't hesitate to to tell me. I would be cautious with a seller who didn't want to disclose financial info on a multi family property....

I have all my properties under one LLC. I do know of people that put each property under its own LLC but I have the same thought as you that it would be a royal pain to do that plus I wonder how much protection it truly would provide.

Here in North Carolina I just paid $405 for a 15 yard dumpster

@Rob K. , they are useful if you have different brands, in my case I have an iPad, an android phone, and my kids have samsung tablets all use different AC adapters. With the USB outlets all I need is the cable to charge them.

@Rob Shah , Yes I have done the exact same thing. I have a credit line with a local bank using a free and clear property and collateral. I have tapped into it multiple times to purchase other investment properties. I am not sure what the big banks would offer but I would imagine many local banks would be willing to extend credit with your paid off property.