All Forum Posts by: Andrew Feil

I just had a similar experience with a tenant losing a job and moving to NJ 6 months into her lease. I told her as long as I got the unit rented the month she was moving out then she would get her security back. She was very cooperative and made sure the apartment was ready to show every time I needed it and made sure it was spotless before the next tenant moved in. I had another tenant moving in the day she moved out so it worked out well for me.

I have however, heard of other landlords in my area not refunding the security deposit when the tenant broke the lease. They had that language in their lease and I do as well, that the security deposit is forfeited when the lease is broken. I haven't heard of this not holding up in court.

Thank you for the advise guys! Turns out there were already multiple offers on the place so to be competitive we would have had to go conventional which would've required 25% down. I don't have the cash at the moment for that so I guess I will have to wait for the next one!

Hi BP,

I am a fairly new investor, I only do this part-time at the moment but I manage and do all of my own work. My goal is to go full-time someday, but for now I am just trying to build my portfolio while I still have a full time job.

So, I just closed on a 4 unit property in December that was fully rented and cash flowing. Purchase price $148,000, ARV $170,000. It needed a couple updates and will need some other minor work done in the future, but for the most part the only work needed is if something breaks! This was purchased under an LLC and was funded from private money (down payment $29,600) and a commercial loan (Mortgage $118,400).

I just found a great 3-unit property that is foreclosed in another good area close by. This one is vacant. It is listed for $70,000 and just needs paint, carpet and a cleaning. (No for real, that's all it needs). I'm estimating at the most, $10,000 in repairs and updates. I am hoping to close at around $65,000 and use an FHA Rehab loan so I only need to put 3.5% down and my repairs/updates can be rolled into the mortgage. The property will gross $1,700 once it is rented and I estimate that it will have an ARV of around $120,000.

I will not have the cash for a 20% downpayment if the FHA financing doesn't work out. If it doesn't I will need to find another private lender to fund the 20% down. I know this is a great deal, but am I jumping too soon after I just bought the 4-unit 3 months ago? I will have about $6,000 cash in reserves in the LLC to cover the mortgage if need be until I get it rented, but is this okay to use this money since this new property won't be under the LLC? (FHA cannot be used for LLC financing). And If I were able to close on this, would you recommend a cashout refi to get away from the FHA and avoid the PMI?

Thanks for any advise you can give!

Oh okay you were talking about actual insurance that you buy, got it! That definitely makes sense about the liability part though, Thanks!

@Bill Gulley What do you mean by "insurance can be had either way"? Do you mean, if properly run, a property under my personal name offers no more risk than a property under an LLC that is properly run?

Sorry, I should have clarified that Doug. I had set up the LLC for the protection that it offers since my overall goal is to own a number of investment properties, which in the long term, I think would be wiser to be owned by an entity rather than an individual. However, I like the financing that the conventional mortgage offers, since I can lock in the great interest rates that we have right now and not have to worry about what the interest rate will be in 10 years. So I am struggling to decide if the asset protection of the LLC is worth the possibility of not having the better interest rate down the road.

@Nicole A. No the commercial option is through Luzerne Bank. He told me straight out that every five years it will be adjusted to whatever the current rate will be, I believe this is pretty standard for Commercial financing.

@Doug Smith The Rate on the 15 year amortized over 30 years is 4.95%.. slightly higher than the Commercial. However, there are no rate adjustments during the 15 year period, which is definitely attractive. I am struggling with the asset protection of the LLC though...

Thanks for the feedback Bill! Here's one more twist, the bank that I am dealing with does a 15 year amortized over 30 years. So it would balloon at 15 years, but I can obviously make extra principal payments to have it paid off in 15. This would drop my cash flow for the time being but this is definitely a property that I can see holding for a long time. Does this change anything in your opinion?

Hey BP,

I would like your opinion on my financing options on a 4 unit property that is fully rented. I was originally planning to buy with a conventional 30yr mortgage, but then found out that I cannot use this financing when buying through an LLC. I can only use Commercial financing which is 20 years, adjusting every 5 years. Interest rates on both types would be between 4.5 and 5% currently. However the interest rate on the commercial would change after the 5 year adjustment to whatever the current rate is then. Would you recommend putting it under my personal name and locking in the current rate with the 30 year fixed or stick with my LLC and go with the 20/5 Commercial financing?

Thanks for any feedback!

Hey Justin,good to see another Wilkes Barre/Scranton resident on BP! I currently live in the area and am in the process of building my portfolio of buy and hold properties in the area. Hopefully we can connect at some point!