All Forum Posts by: Chad Linn

Disregarding state and local gov't actions, it looks like the federal 'stimulus' bill that just passed only applies to federal backed loans. Is that accurate ?

Cameron Tope hit the nail on the head, "lower prices" and "some landlords are going to get squeezed."  If you have commercial loans with ballons, run stress tests at 8, 9, 10 percent.  History generally repeats itself.

I have a set of 8 duplex/triplex buildings occupying a single street.  Has anyone designated a group of properties as a 'retirement' community with some sort of age qualifier or is there such a thing?  Is there a discrimination concern or a procedure or exception(s) to follow in order operate as such?  Positives or negatives to such a strategy?

I ended up locking 5 years and years 6 thru 10 adjust with prime.  No prepay penalty. 

It occurred to me that since these are duplex properties I could refinance each into conventional mortgages.  That might be the best strategy.

That might also be a sell strategy if rates rise.

The Fed is telling us that rates will continue to rise.  Interest rate risk might be the most significant risk if you are borrowing.

Look at a historical prime rates http://www.fedprimerate.com/wall_street_journal_pr... .  

If we get into a period of 10 to 20 years averaging 9, 10, 11 percent prime, what is your plan?  

Rising rates and balloon payments coming due is a great way to clear the market.

Thank you all for you input.  I felt like just getting years 6 thru 10 in play, extending the balloon was good and settled at prime plus 1%.  That is on a 25 year amort.  Rates are going to rise, so we should all plan accordingly.

Multifamily contract, commercial loan 85% LTV. Seller agreed to pay all closing costs. Seller wants to use his title company to close which that title company has been in existence for over 100 years and good reputation.

I had intended to use the title company of choice, but not a huge issue.  Anyway, from a risk perspective, does it really matter?  Since the bank is going to require clear title pass from the seller to the buyer to close the loan, aren't they my gatekeepers, and it really doesn't matter which company we use?

Hi all.  First time MF investor.  18 units, (6 duplex 2 tri), $810k purchase price, $120k cash down payment, cashflow after all expense and reserve and project note payment is $1600 per month.

Bank to finance $690k.  Offering 5 year fixed at 5.25%, years 6 through 10 float at WSJ prime plus 1.5%, Balloon end of year 10.  Recourse loan with personal guarantee.

Positive - they are letting me in at 15%, no prepayment penalty, i am a first timer with no self-history although have managed for others, i think i could sell it for 950k or so as is and get cashflow to 2500 per month in a year.  

Negative - prime plus 1.5% is much higher than what I am used to getting for clients.

Prime plus 1.5% might be a deal breaker in my mind.  Am I being unreasonable?

Karen, thank you for helping me get up to speed.  24 months is doable if an alternative can't be found.

Tim, that would be a bad deal wouldn't it!  1k is after-tax cash-flow number.  That's the most meaningful way to think about any of this in my opinion.  So, yes, that is after the bank payment.

Thank you, Karen.  I do have the 5-year fixed rate at 25 year amortization.  I anticipate holding the property 10 years or more, long-term hold.  I think I could shave @ 1 point of interest with the initial refinance - that is an immediate cash flow benefit.  The second cash flow benefit would be mitigating the ill effects of a rise in rates.  In five years, if the refinance rate jumped 1, 2 or 3 percent, it might only take a few months of that hit to equal the cost to refi.  I don't want to go through all of the work to get rents increased by 30% and then giive it all back to the bank.  What do you think?  Also, yes, the one million threshold...if I appraise at 1.2 million I could loan at the 1 million threshold without regard for purchase price?