All Forum Posts by: Daren Jones

Hi,

The 4 plex sounds like a good deal.  I am not sure your can use a general rule of thumb when asking that question as there are many variables.  
You of course have to consider your exact needs. That being said, rates are incredible right now. The loan is fixed for 30 years. Why not use a HELOC when the time comes as the vehicle to pull out additional cash for the down payment on the next property?

Good luck.

Do you know who the host is or time and dates for the meetings in Tacoma or Puyallup WA? 

Hi. Great questions. I think there are a few more variables you would need to ask yourself as these are very general questions and everybody is a little different. The one thing is the loan amounts, are they conforming. How long are you looking at keeping the properties, or more importantly how long are you going to "stay in" the loans (would you possibly refinance them for other property purchases if they doubled in value in 10 years). 

As a general rule assuming you have less than 10 properties I would say almost always refinance the debt into a 30 year fixed product. It makes way more sense from a stability and long term forecasting tool. The rate will stay the same for 30 years. The current rates are lower on the 30 year products and until you meet the maximum loan amount or property threshold why would you not? I think the only thing that is safer is the ability to acquire the loan given your current banking relationship. 

Can you use your current bank for the 30 year fixed product? The worst case scenario is you have to have a commercial loan if you do not qualify for the 30 year product. When you purchase commercial you will most likely have to have a commercial type term down the road anyway. I think the safer loan is the 30 year fixed product.

Regarding the relationship. I think if it is a true relationship they would want you to do the same and lower your debt to income ration by having the lower rate and the commercial banker would want to have you know that you now have a much more stable portfolio with the fixed rate product. Just make sure if you do have a pre-payment penalty they will waive it on your current loans. 

I hope I answered all of your questions and this helps. 

Daren

Hi. I was told about the site from a Boeing employee and real estate investor when I was buying a range for a rental unit on offer up. What a great site, sorry I did not hear about sooner. I have been investing since 1998 but became really serious in 2009. I have single family and commercial properties and am always looking for the next great deal. I usually buy distressed, stabilize them and hold. I am not opposed to flipping the perfect deal. I am looking to find a new bank that can complete me hold financing as MBank just informed me they are no longer able to lend in the Seattle area. I look forward to meeting great people and creating new business relationships. Thank you, Daren