All Forum Posts by: Carrie Hallensleben

Currently my husband and I own three rental properties along with our primary residence. We are interested in moving toward small multifamily i.e. 4 to 6-plex to start. My question involves financing. We have a home that has 10 years left on the loan and we owe about 90K. We have a HELOC we can use for 80K. However, if we are to access that HELOC, the lenders have told us that is using financed money for the down payment. Would it be smarter to refinance the home and pull about 100K in equity to use for investing? Another question...if we refinance but it isn't our primary residence anymore, will the terms be worse than refinancing an owner occupied property. Any feedback about the pros and cons of this would be very helpful as we try to move forward in obtaining a multifamily investment.

@David MIller

We used to live in Squire Park although the neighborhood association was Manheim Park. We lived on this amazing little street called Manheim just south of 39th St. We loved it but it was definitely city living in an enclave close to war zone (just on the other side of Paseo). We ultimately moved up north when our daughter was starting school. The surrounding neighborhood is improving but it really is street by street. We were just over at our former neighbor's home for dinner last weekend and there has been a lot of investment on that street and very little turnover. Don't know if that exactly answers your question...

Here is another questions for you. We are considering selling a property we bought, renovated and rented two years ago. The market has improved recently and inventory in this price range is low. However, while our money could be reinvested elsewhere, I am having a hard time deciding whether to let go of the property because of the prime location. Has anyone ever taken an equity partner in a situation like this? I know out of state investors are often looking for turnkey in Kansas City. Would switching the property to joint ownership in an LLC with the equity partner paying in say 70% of current market value and then on our end, we contribute with maintence, marketing and management of tenants, would that sound like a fair 50/50 partnership? Does the value we bring with having obtained the property, remodeled, placed and managed highly qualified tenants make this a desirable deal? My husband is a licensed contractor who has completed our rehabs and managed our properties thus far. We are trying to move toward some multifamilies in the not too far off future. As always, thanks for any advice:)

@Mike D'Arrigo 

Thank you for the offer. We have spoken with the seller about 5 year financing and are waiting to hear back from them. Our own bank Community America Credit Union said that after 4 we are going to have a tougher time. We found a very good portfolio lender but the terms are with adjustable rate so we are weighing other options. 

@Lee Ripma

Thank you for the advice with the Google sheets. What a handy tool! I feel much more confident now in making sure that we stay within our means and make an offer that is good for all involved. So great to hear from you all.

@Tom S. Thanks for the information and encouragement. Since you have experience in this area, I wonder if you think putting up 10% as a down payment would be viewed favorably and also, what would you like to see from an investor you are thinking of lending to. I will print out the amortization schedule and come with our personal financial information. She has already seen the work my husband did on the property next door because she was interested in getting tours while we completed the remodel. Also, she knows that we screen for highly qualified tenants and we take good care of the property. Do you have any advice about what she may be interested in knowing in addition to what I have mentioned. Much appreciation for your reply:)

Thank you! I will give that a look. 

@Dan Mackin 

Hello fellow BPers,

We currently own 3 investment properties and just assumed a VA loan after a lease to buy option with the seller for our current primary residence. That was kind of a nightmare but it finally is all wrapped up. In the meantime, we were offered a townhouse to buy that is right next to our first investment property. All of our properties have been highly sought after and we have experienced relatively low vacancy. We negotiated an agreement with the seller for about $20,000 (or more) under market value. It is a sellers market and prices are rising right now in Kansas City. We will put about 15K into improvements to get the high quality tenant we want.

Now comes financing...Since we have 4 mortgages, it is proving more difficult to get conventional financing. We also have a HELOC that we can draw from up to about 70,000 however, that seems to be considered borrowed money for the down payment. I am working with a portfolio lender and hope to be able to make the deal work. I realized though that the owner of this property is pretty likely to have it paid off so now I am considering talking with her about seller financing.

I would love some input about how to structure that. I feel a bit naive here because I am having difficulty understanding how the interest works. If we were to pay 10,000 down and then finance with the seller 112,500 at 6% or 7% (not sure if that is enough to offer) for a period of 20 years, how would I figure out payments? I looked at a principle payment of $468.75 before interest but then when I looked at interest for the first year, it looks like $562.50 per month. Paying over $1000 per month before insurance and taxes would not be possible. Is there another way to look at this that I don't understand? Anyone that has structured these deals, surely knows more than I do:(  Please help me see if this is feasible. 

Thank you!

@Jennifer Niez I wondered where your properties are located. We have no problem with adding value to a fixer upper but we only invest in specific areas. Please let me know. Thank you! 

@Anthony Gayden First of all, Love the Omaha Zoo! One of our favorite get-aways with the kids! We have seen a lot of investment in downtown with the Power & Light District and River Market. Also, it is incredible to me what is happening with real estate investment in midtown. We lived in Manheim Park for 10 years and while our street was an oasis of beauty and diversity, what we continuously heard was an up & coming neighborhood, never quite hit the mark while we were there (2000-2010). While we were there, there was a lot of talk about the Green Impact Zone that Congressman Cleaver had fought for. After we left, we saw that Brad Pitt had invested a lot in this area. Recently, I have noticed development & improvements happening east from Main to Paseo from 31st south to Brookside Blvd. It is great to watch this! Also there is a ton of growth up north where we live. We hope to stay in the game and impact our future with solid investments of buy and holds. 

@Travis Turnbull Great for your city too! I was just in St. Charles for a teaching conference. I loved the little historic town there!