All Forum Posts by: Christina Arango

I had no problem at all where I live.  Both banks that I talked to were happy to write the loan, but we did have to personally guarantee it.  

I would recommend putting your lease together and then have a real estate attorney look over it.  I went through that process and learned a lot.  For example, in Florida, it is the landlord's job to take care of the screens (no matter what) and not having screens is an easy way for a tenant to sue. There were some other little nuances as well for my state (how much interest can be charged) and then a regulation for my city that my attorney brought up.  It was $200 well spent, but I am glad that I took the time to put together a lease on my own first.

Hi Jacob,

I understand the confusion since I am relatively new at this too.  I take "knowing your market" to mean that you have a good ballpark idea what properties are usually worth in the area that you want to invest.  For me, I have several specific neighborhoods that I look at, and just yesterday found a property listed that I know is around $10-15k below market value for that area.  Today, I'm trying to figure out if there is anything wrong with that house or if there is just a motivated seller.

If you are planning on investing all around a city, then I think that you would have to know that city.  If you are like me and there are only a few neighborhoods that interest you then you need to know those areas.  As I'm sure you are aware there can big fluctuations throughout the city.

That is my (limited) experience.  I've only bought one rental so far, but I'm hoping to add another by the end of the year.  Perhaps wiser people will comment on this thread now. :)

@John Suralik  I know.  I thought that was a really low number as well, but that's what the banks use here.  I ended up sending in my numbers which are a little more conservative than what the bank uses (eg. 8% vacancy, 5% maintenance, 5% capex, 10% operating/other).  We shall see what they say.

@John Suralik, I'm not sure if this will be helpful for you, but I'm getting ready to do my first deal, and the two commercial lenders I have talked to have said that they use a 5% vacancy rate and an additional 5% for management. In addition, they want to see the usual stuff: property tax, insurance, maintenance costs, and any replacement costs that I forsee in the near future (eg. roof needs to be replaced in 3 years). They also want to see a 1.2 DSCR or better.

Hi Scott and Kary,

I live in Gainesville as well, and I'm just about to purchase my first rental property.  Good luck with your endeavor!

Christina

@Matthew Hanrahan  My (limited) experience has been that you can start to look at properties with an agent, but you should also start to understand the financing part of the picture by finding a good mortgage broker.  Your agent will want to know that you are serious about the process and one of the ways of doing that is securing a pre-approval letter.

@Daria B. Thanks so much for elaborating on the landlord permit rules.  I found the city's website very frustrating in that respect.  And I had forgotten to mention the 3 unrelated individual rule, so I'm gland you did.

@Don Johnston...well we could argue about San Diego as it's too cold for me in the winter, but we won't. :)  I'm just getting started with investing in Gainesville, but I've lived here for about 15 years.  I am quite happy with my agent if you'd like a name.  A friend of mine swears that Ocala is a better place to invest, but since I'm new to the game I want something that is within a 5 mile radius of my house.

And I just learned that Gainesville has a landlord permit system in the city where you can earn demerits if your tenants draw complaints from the neighbors.  I'm not sure how often that happens though.

Hi everyone,

I've been calling/visiting banks in my area to decide where I feel comfortable.  I am a newbie investor getting ready to purchase our first rental properties (I'm hoping to buy 2 this year and 2 per year hereafter, assuming I get along with this business).  We are looking to diversify our income-producing investment holdings.

I've read the articles about forming an LLC, and we have decided to do that since we have quite a few assets that we want to protect.

Today I talked to a loan officer that told me that I could easily transfer the title over to my LLC after signing a personal loan and that the bank would probably never find out. But then he also suggested that I look into commercial loans if I want my LLC to hold the loan, and assured me that they lend amounts as little as $20k up to the really big numbers. He also mentioned that I might be able to secure a line of credit that I could use at my discretion.

So, my question:  Should I try to go the commercial loan route or wait until I have a few properties to explore that avenue?  From what I've read the downsides to commercial loads are: larger down payments, higher interest rates and shorter terms.  Anything else?

Thanks for any advice that you can offer.