All Forum Posts by: Craig Lessler

Regarding a future 1031 tax deferred exchange, I estimate $800K will need to be invested into replacement properties to continue to defer tax liability of all depreciation recapture and capital gain from the sale of a property.  If the depreciation recapture is $200K and there is an additional long term capital gain of $300K, could $150K of carry forward capital loss be used to offset depreciation recapture and a partial 1031 exchange be made into a new property purchased for $650K without incurring a tax liability?

please add me to your list.

Preston, does your company finance non-warrantable condos in Arizona? If so, is financing only available to owner occupants or is it also available to investors? Also, if financing is available, at what LTV and interest rate?

I ask because I have noticed some condos for sale where it is specified that the buyer must pay all cash without financing.  These are condos in which a majority of units are investor owned.

Thanks for the quick response.

For purposes of calculating a Debt to Income ratio for a Fannie or Freddie loan, does the premium paid each month on an over funded Life Insurance policy (IUL) count as debt?  Or do you only count the portion paid for the actual insurance and not count the over funded portion of each payment?

Also, if contribute to a large sum to a retirement plan, does that count against you in the calculation of the debt to income ratios when applying for a Fannie or Freddie loan?

Could you send my the new AAR Forms? I am not a member of the MLS, although I am a licensed AZ broker.

I am entering into a contract to make a bulk purchase of 10 Condo units in Arizona. Does anyone have a good contract form with provisions for HOA, financing contingency, due diligence, etc. The deal is off-market with no brokers. Thanks.

I am entering into a contract to make a bulk purchase of 10 Condo units in Arizona. Does anyone have a good contract form with provisions for HOA, financing contingency, due diligence, etc. The deal is off-market with no brokers. Thanks.

I am looking to make another bulk purchase of Townhomes in the Phoenix area.

Criteria:

1. $1.1M maximum purchase price

2. 8% or better CAP rate (including property mgt, vacancy, repairs, CAPEX)

3. Prefer ranch style units

4. 2 BR or 3 BR units

5. Class B

6. Potential value add.

Thanks Bill.

It has been a long time since I have had a commercial loan and I appreciate your input.

There are 405 condominium units in the complex and I own 16 units so I own less than 4% of the complex.

The units in the complex (built over 30 years ago) are owned by owner occupants and investors.  I believe it is roughly half and half  and I would guess that more than half the units are owned by owner occupants.  Both the owner occupants and the tenants generally stay a long time in their units and turnover is not high.  The property is in a desirable location and is very clean.

Also, I was surprised to learn that out in Phoenix, Arizona investors do buy bundles of condominium units for investment and it is not uncommon.  The former owner of the 16 units I owned had bought all of the units in one purchase and had a commercial loan on them.  The interesting thing is that the trustee for the seller was a small local bank and I may also give that trustee's bank an opportunity to earn my business since the trustee managed the property for many months and has familiarity with the property.  I also had a good rapport with the trustee throughout the purchase transaction.

I also own pieces of a couple syndications that own apartment buildings and both of them have financing with 30 year amortizations (one apartment building is worth about $45M and the other about $5M). The syndicators of apartment properties I have seen on BP seem to be able to get favorable financing terms and be able to refinance with 30 year amortizations with a low interest rate fixed for 10 years and with a 75% LTV. I would like to get a loan term of 20 to 30 years and avoid a balloon.

I will be contacting the syndicators to find out where they get their financing and terms I should be looking for.

I would only do the cash out if I entered into a contract to buy another multi-unit property.  I would pay cash for the new property to keep my over all leverage low and below 40 or 50%.  I am hopeful that I could get a loan approval very quickly or at least quickly find out if I can be approved.