All Forum Posts by: Dennis Powers

Get agreements in place, everyone can’t say it enough. Pooling money might be your best bet but probably better off outside of Boston for the first deal. Get something that cash flows, you know u can get 4.5% return on your cash sitting on your couch so u gotta do better. Good luck, its a lot of fun when it gets going! 

Hi I'm asking advice, I own sober homes in Boston area so my properties get a little bit more wear than normal apartments. I would compare to dorm style living. I’m finishing the rough on a 30 bedroom 5 bathroom. Do I install white subway tile 2x6 like always or should I go big 12x24 less grout lines means less mildew. But bigger tiles make me nervous of cracking? What do u install? 

Quote from @Dave Foster:

@Dennis Powers, Yup x 2.  A cash out refi is not a taxable event.  And if you wanted to you could also use the 1031 to purchase two replacement properties.  But allocate the proceeds so one is purchased for cash.  The other is purchased using maximum financing.  Then you can refinance that free and clear one whenever you want.  

Thanks, Dave
Would both new properties each have to be valued more that the sale price of my current properties? Or the total value of both? Thanks

Quote from @Bill B.:

Yup. After not before. 

Thanks, Bill
So if I refi a few months before I sell and grab a chunk of cash, then do the 1031 that’s a problem? Is that for the life of the mortgage or just a period of time before a 1031? Thanks

Hi,

I have a question: looking to 1031 out of 3 properties as a portfolio sale. New property will be equal or greater in price as per the rule. When I buy the new property I will now have 50% equity in the property. After the sale is final, can I immediately pull some equity out, tax free? 

Can I buy a property with a conventional loan myself, then attach a LLC to the property with my 2 partners?

Will the bank allow that?

That said if we were to run a business out of that house under a LLC could the bank call the Note and how likely is it to happen?

Originally posted by @Russell Brazil:

  I just keep buying no matter what.

Just keep buying. I like that Russell!

I also have a 2 family in Chelsea, that I'm considering selling realtor just told me to list it at $615k? Its small and needs updating.

I don't see prices falling anywhere around Boston anytime soon.

@Dan K. Dan all my loans have been residential loans, I know my days are numbered before I have to start doing commercial loans. As for the return on principle - that’s the only reason I haven’t taken money from investors. After I purchase and rent out the house, I didn’t add 25-30% value to it so I’d be banking on paying my investors back with a cash out Heloc or refi 5 years later. I’m just not confident enough the market is going north in the next 5 years. Some money gets paid from armortization but not 25%. So I think my only way would be to make double payments back to the investors interest and principal.

@Christopher Richardson Great idea Chris with the referrals! Wouldn’t I have to have a pre existing relationship with any new investor? Im not familiar with commercial lenders do they care if I borrowed the cash for the down payment? Or would I need to let the money “season” for two months?

@Dan K. Thanks Dan - yes rates are rising, sellIng would never be an option. I’m nervous banking on a 2-5 year cash out refi to pay back investors. If the market corrects or has a dip, I don’t have enough value in the property. I’m not buying off market deals ( not much equity) other than the 25-30% investors gave me for down payment.