All Forum Posts by: Clayton Silva

Love it! The landlord/friend balance is definitely difficult to navigate!

Hey Wai, are you planning on occupying the property or strictly an investment build?

Hey Kay Kay, I am not an insurance agent, but I believe you can get an umbrella for anything, its based on a coverage amount though, so you would have to pay for say $20M in coverage (probably $1,000/month) for that amount.

Invest in a landlord friendly state haha.  It costs $400 and takes 2 weeks to get someone out in NC. 

I think this is a great question. If all your lender does is help you close one transaction then you are absolutely correct that a relationship with that lender does not matter. However, when we work with clients we are typically doing multiple things. We are advising, helping clients ensure they are doing their due diligence well, then we are also shopping for their loans since we work with over 100 different lenders, then we are saving the client's file and building out multiple scenarios to ensure that they are able to qualify for not just one but multiple different loans and do not back themselves into a lending corner where they no longer qualify for new loans. We stress the importance of relationship because we are not looking for one off transactions with random clients, but rather we are looking to deliver premier service to our clients and find the best products while giving sound advice. Despite being a smaller brokerage, we are also licensed in many states so we can help clients in a lot of different markets. I realize this is sounding like a sales pitch, but a good lender is probably one of the most important members of your team in your real estate journey in my opinion. Lastly, as far as risk, I have a ton of thoughts on risk, but ultimately the true definition of risk, to me, is lack of information. I do not believe that higher or lower leverage is risk, the real risk is the lack of information/knowledge about the market, trends, codes, permits, tenant laws, accounting, etc. and all things that could impact your personal real estate business. There is a great investor I listened to, whose name is escaping me, and he talked about people's "sleep number". He defined it as: if your investments, real estate, loans, leverage, etc. are keeping you up at night, you are outside your sleep number/risk profile and likely need to tone it back. That number is going to be different for each person. I have a few properties that are or were at 90+ LTV and I think one that is at 110% LTV. I sleep like a baby, because they are still cash flow positive, very steady, and have been great investments for me personally. Hope this helps!

Hey Rick, what states are you investing? (Just curious!) As for the credit card, I just started using the AMEX Blue card which is 2% back on everything. (This is a business card and requires a business bank account and LLC or corporate entity). It has a $50,000 limit which is great for rehabs we are doing! So far very pleased with it and I LOVE American Express so I am a little biased.

 I actually do not agree with the answer above me.  A solar lien is not that big of a deal typically.  All that means, is that you do not own the solar panels.  They are either leased or not fully paid off.  If you were to sell the house, part of the proceeds would go to the lienholder (solar panel company) to either pay off the solar panels, or the lien would be transferred to the new buyer who is buying the home.  I have a solar lien on one of my properties and it's not a big deal at all.  That is just me.  Long story short, all it does is protect the solar panel company from someone not paying off the panels. Your house is not going to be taken away and you can remove the lien in most cases (I cannot remove my lien because they are leased panels not financed panels so I would have to remove the panels from the house and return them to Tesla in my case at which point I could have the lien removed).

Many people do not do this, because most banks do not lend on raw land nor ground up construction.  Typically it is a financing issue. We have started to do some ground up construction lending but for the most part, it is a pretty significant risk for the banks so they don't like to lend on it.  So, unless you have a pile of cash to buy the land cash, and pay for the construction in cash, and then refinance later, it is really hard for the average person to do a ground up construction.  

Great question! A lot of people (myself included) use the HELOC to purchase undervalued properties, put a little work into them and do a form of a BRRRR. I will typically refinance the property once it is stabilized and get as much of my HELOC back out as possible so I can use it again! Hope this helps!