All Forum Posts by: Chris Lohmeier

I don't know how much you have already done, but I would suggest you also try shopping around a bit more.  You should be able to find a local credit union to give you a loan with 20% or less down.  

$249 is really high for a one treatment.  I just had Orkin spray my 5-flex for spiders and other creepy crawlies that had came up this spring and were getting in.  They did the exterior and the inner halls/stairways/laundry room for a total of $95, $10 of that for placing some new catch boxes outside.   

Hello Dalton.  I'm currently in "East Central" (Highway 81 corridor) Nebraska and I see a lot of the deals you are talking about.  However, there are much better deals to be had they just don't come up often and they move really quick, I've had to offer the first day to have any chance of getting them.

An example I'm about to close on is a 3-2 MLS deal, asking price $90k that will easily rent for $1,200. Comparable rentals that come on the market in my area are rarely active for more than a day.

I'm guessing your specific area will be about the same, I am finding most of Nebraska outside of Lincoln and Omaha is.  There deals are here, you just have to find them.

@Mark Bookhagen 
I thought of that same question last night, here the response I got this morning.

"We can do that and would expect the loan to be paid down accordingly. We can have individual loans as you have now but all the collateral would be cross-referenced. We would always be looking at equity positions in terms of how much paydown we would expect. In other words, it might take more than just the payoff of an individual loan if the property sold provides additional equity for the total package."

It looks like I'd be okay to sell as long as I have cash to cover if I sold at a value lower than the properties overall contribution to the package.

I'm shopping for lenders on a new purchase and came across a question I want to run across the great minds here. The property I'm looking at purchasing is a SFR for $86k. My usual credit union has already approved me for a loan at 5.5% with 20% down, 5 year balloon, and 20 year amortization, which is pretty standard from what I am seeing in my area.

Another local bank has offered me a portfolio loan that includes three of my other recently purchased properties. The approximate numbers on those loans are as follows.

• 1.$56k, 5.5%, ~4 years left on balloon, 20 yr am.
• 2.$98k, 5.0%, ~4.5 years left on balloon, 20 yr am.
• 3.$63k, 5.5%, ~5 years left on balloon, 20 yr am.

The second bank would let me purchase the new property with no money out of pocket by wrapping up the other loans at 5.25-5.75%, with a five year balloon, and 20 yr am.

I have a good credit score, even though all the new loans are hurting my length of history numbers, so I’m pretty confident I would qualify for the 5.25% rate.

My question is what would you do? Do I wrap everything together, or hold them apart for a little longer and let them season a bit more. I like the idea of not having to put anything down on the new house as a 20% down payment would require I dip into personal funds in order to maintain proper reserves within my rental funds.

Additional information:

My current credit union is very small, if I want to expand much further I will have to look elsewhere anyway.

The new unit and one of the units above are long term holds that I have no interest in selling. One of the other two is a sure sell within the next five years or so, unless the current tenants stay longer. The final one falls somewhere in between.

I have a very specific situation but also a broad question.  

I have a property under contract with a closing date that gives me plenty of time to search around for the best mortgage. This is a good SFR, a great deal, and I have no intentions of doing anything other than holding it at this point.

I have three leading contenders.  

My usual Credit Union: I've already been approved at their standard terms of 5.5%, 20 year Am with a 5 year balloon.  

A mortgage broke: with terms of 5.625%, 1.875% in points, 30 year conventional with no balloon.

Small town bank in my area: Not final yet, but looking like 4.75-5.25%, 20 year Am with a 5 year balloon.

The broker will have quite a bit higher closing cost with a conventional appraisal whereas the credit union and bank will do them in-house. 

So situational question. Is there any reason not to pay more up front for a higher rate, but be guaranteed that the rate will never increase?

Also, are others seeing rates that are much better than this for 20% down?

Broader question. At what rate differential would you not take the 30 year loan?

Thanks for any advice.

My aha moment came last February, three years after turning my first primary residence into a rental property and after three years of doing nothing else real estate related. My girlfriend and I drove by a sign on the side of the street that said "For Sale By Owner." I called the number and started talking with the owners, an older couple who had been using it as a rental property and who were tired of dealing with poor tenants. The property needed a bit of work but I knew from watching the market that they were way under charging rents, and not screening was getting them bottom tier tenants. Decided I might as well see what the bank says, this was the main thing holding me back previously, the thought that the banks would just dismiss me. Long story short, they didn't dismiss me and gave me a business loan. After a month of sweat equity and a month of screening for the perfect tenants, I made nearly 30% CoC in that deal.
The real aha moment was when I looked back and realized how easy it all was. I finally believed I could do this. I went on to purchase a 5-plex that July, another SFH this February that I'm currently converting, and just the other day I drove by a sign on a 4-plex. After talking that owners of that 4-plex, another older couple winding down their real estate empire, it looks like I might be able to purchase roughly $500k worth of properties for about $10k out of pocket, through seller seconds and a small personal loan, by years end.

The only issue I can see here is that the word "should" is used a lot.  I would want to make sure ahead of time that I had a good relationship with a bank who I was certain would willing to work with me on the back end even with the SOFI debt.  The money is relatively cheap, but having to hold onto it an extra year could be a killer and would severely hamper any thoughts of a quick second deal.

Are there separate heating and cooling units in the triplex?  I could see a main floor tenant putting a programmable thermostat into a unit that had one central HVAC system and setting it up completely to their schedule.  This would of course freeze the downstairs tenant that works nights.   

I actually had this problem in an upstairs room of my personal residence when I purchased it.  The cat they had apparently used the entire room as a litter box.  It was the worse carpet removal I've ever been a part of.
I didn't want to use Kilz because I was afraid it would seal the smell into the floor and then let it seep through the ceiling of the room below.  I decided to try the Dutch Boy Refresh paint before tearing up the floor because I figured at worse I was out ~$30 and at best I'd save a ton of work.  I ended up painting the entire subfloor and walls with it, after sealing the ceiling with my normal CHB.  The next day the smell was completely gone, I couldn't believe it.  It also never migrated to the room below.  I wouldn't recommend "Refresh" for general painting, there are much better options, but it is now my go to odor eliminator.