All Forum Posts by: Paul Garcia

Hi All,

Does anyone have a good suggestion for a website to run credit checks through? I currently use myrental.com. Works great, but bascially sends the applicant a link to Experian and has them sign up and "release" their report to me. I have the applicants sign a credit authorization form when they apply so having them go through a sign up and authorization online again seems unnecessary. Any websites that allow you to just type in an applicants info and check off that you got authorization?

Thanks!

I keep utilities provided by the city in my name. I'm under the impression that unpaid utility bills to the city can eventually result in foreclosure. I've been fortunate thus far and have not had any problems collecting from the tenants. I've also found this to be a really good way to get close with the city employees because your name comes up a bunch (small town pop. 11,000). 

I'm having a hard time loading sorry. The doors are veneer light oak and so is the trim. The home was built in 2002. I'm just trying to freshen up the place before I rent. 

Hello,

I'm having a hard time deciding whether or not to put in new white baseboards. I'm installing some darker flooring and the current base board does not match with it very well. The issue i'm running into is that all the interior doors of the house match the current base board, and so do the jams (see picture). The doors are super cheap and they would be very hard to paint. Any opinions on how white baseboard would look butted up to the brown door trim or if I changed the casing and left the door jams brown?

Hi Gabriel,

I had the exact same start to my investing! My parents gifted me a house and I pulled cash out of it. I went with a cash out refinance. I don’t think anything beats a fully amortizing, 30 year fixed rate loan at the current rates. I just turned 24 and currently closing on house number 5. I’m not sure what your real estate background is but if you have any questions or need some tips feel free to message me. Getting the financing to invest the cash out quickly was not as easy as I had hoped. 

Seeking wisdom from investors who’ve been through a cycle or two. I’m 23 years old and realize I don’t have the experience of someone who has been investing in real estate for many years. I’m a numbers guy and I create models/projections of where I will be in X amount of years given certain assumptions. Obviously a huge factor in these projections is my return rate. So far, things have been great and my returns are all in the mid 20s with buy and hold properties with no major work or unconventional financing. I hope this will continue forever but I know that mindset would be naïve. How do changes in the market effect return rates (interest rates, home values, rental rates, etc.)? Simply put, what could possibly go wrong!? I’ve always assumed with my type of investing strategy, everything balances out. For example, when interest rates were 15% (can’t even imagine) people still invested in real estate and were profitable, right?

An idea popped into my head today and I don’t know if it’s possible or feasible.

Hypothetical situation. You own a property with a mortgage. Bought for $100K with $25k down. Before taxes, it cash flows $7.5K. It's held in an LLC where you are the only owner. Could you sell interest in the LLC where the investor would not be responsible for any debt? Could you sell $10k worth of interest but only give $1.5k of the cash flow? Lastly, could the $10k investment be an unapportionable share of the LLC?

I basically want to sell a share of my properties but not dollar for dollar. It would still be a good deal for the investor, 15% return on their cash ($1.5K/$10K). I would also not want them to get a full $10k of the equity in the property. In this example I would like to have the $10k equal to 20% of the equity, or $5K. Would there be any tax implications?

I looked into B2R a couple of months ago. They are legit and what they offer is amazing. But they charge really high interest rates. When I called they said somewhere around 7%.

I choose investing in real estate! I think it clear that definitively declaring one a better investment is impossible and at a the end of the day both are solid. I choose real estate because I really believe in long term family wealth building. What my parents have will be mine, whats mine will be my kids, and so on (hopefully). I never want to willingly sell a property, only add to the pot forever. To me, a 401k is simply a piggy bank you don't break open till your 65. Its not for creating wealth, its a savings plan. Best case scenario you live only off the dividends. Then you have a pile of cash equivalents to leave your children. Of course every family is different and its up to the parenting but it has to be hard not to blow inherited cash on something useless. Disclaimer: I'm a 23 year old filled with piss and vinegar! 

Kimberly,

Since you are looking to purchase 5+ unit buildings, I would assume you're looking for commercial financing. I'm a commercial real estate analyst for a bank and what you are describing is common and is really just a preference for the investor. Analyzing you or the property would be the same whether you obtained financing before or after. I would not even call it a cash our refi. You simply own a property 100% and want to get a loan. I underwrite larger deals but I know the basics are the same. At my bank, the two largest factors would be DSCR and LTV. DSCR is NOI/Debt Service. Across the board the standard for DSCR is a minimum of 1.20x. LTV would depend on the bank but I haven't seen higher than 75%. If you meet those two metrics, it really just comes down to a bank's preferences and the relationship you build. I can only speak from my short 1.5 years of experience but besides those two metrics, everything else is really negotiable at the commercial level and you can definitely execute your plan. Feel free to message me if you want more information about how I analyze NOI. Sorry if you already know all this stuff!