All Forum Posts by: Mike Franco

Does anyone have solid core luxury vinyl plank that has held up for years in your rental without splitting at the seams?

From all the reviews I've read, it seems people are trying to lay this stuff over unlevel floors.

you can't lay this over ceramic tile if there's lippage. 

it appears no one uses self leveling underlayment before plank install either.

Has anyone here actually properly installed plank over a perfectly level floor... and still had issues?

What if you used a few drops of super glue while click locking the planks together?

how much more expensive are the best commercial loan rates vs lowest residential loans, assuming you have super excellent credit (if that even matters) ?

You can get a residential refi now for what, less than 3% now?

would commercial be 5%?

@Alex Bekeza  I'm in the san gabriel valley, so I was limiting my area to where I could drive occasionally. 

So my area would span a 50 mile radius, from thousand oaks to san bernardino/riverside to orange county.

I'd be willing to increase that distance a bit to find deals though.

Where are CA outliers located?

Everywhere I look in socal, house values have skyrocketed and gross rents are in the single digit percents. 

@Ned Carey

Eventually as the rent goes up, it will cash flow better. But even so, eventually a BRRRR investor will hit that DTI limit.

But commercial mortgage... is that how large investors can keep acquiring infinite properties?

As for investing in a 500k that only rents for 2500... that's just what we gotta put up with in socal. We bet on appreciation. Our house values generally rise faster than the rest of the country.

If numbers are this terrible, what are investors actually doing in Socal then?
Surely a lot of them are making money

Help me understand.
How does the average Joe keep rolling endless BRRRRs? The math doesn't make sense because at some point the front end DTI will exceed criteria, even though the investor is more than solvent.

So let's say you have a job that pays $7000/month, and a house that rents for 2500/mo. House is worth 500k.

by these income standards, you can get a cash out refi $350k LOAN #1 at 3%, which is $1475/mo. 

These would be numbers for Socal.
You buy a fixer and fix it for $350k total. Rent it for 2100/mo. Appraised for $500k.
Property tax is $250/mo.

Time to refi and get LOAN#2 for $350k.
Front end DTI is [1475+250] / [7000+2500+2100] = 15%. LOAN#2 approved.

Repeat for LOAN#3 for $350k
Front end DTI = [1475+250+1475+250]/[7000+2500+2100+2100] = 25%. LOAN#3 approved.

Repeat for LOAN#4 for $350k
Front DTI = 3x[1475+250]/[7000+2500+2100+2100+2100] = 33%. LOAN#4 maybe approved.

Repeat for LOAN#5 for $350k
Front DTI = 4x[1475+250]/7000+2500+2100+2100+2100+2100] = 39%. LOAN#5 REJECTED.

You hit a wall, even though your rent more than covers the mortgage payment for each property.

What am I missing here?

typical human psychology. pent up demand, sellers getting greedy and slowly flooding the market.

@Daniel McNulty

Hey, Donald Trump's dad gave him such a gift. I should be doing the same.

I don't mind sweat equity. I might even want to ramp up to 20 units for a $15M target.

Can syndications really turn $300k into $7.5M in 30 years like an infinite BRRRR can?

Syndications typically return less than 10% yearly, which isn't much different from the S&P 500. 

300k would be just over $5m after 30 years compounded at 10%, if it even hits that. At 8% compounded it would only be $3m. 

Yeah Frank, I understand. I wasn't yelling at anyone here. I'm just trying to find guidance where to look.

When you got your loan approved, did they give you a good interest rate comparable to the lowest rates for conventional loans?

.

If I can't get my investment property refi'd on its rental income alone, I'm gonna have to reach into my pockets to subsidize, and I don't want to do that if I can avoid it.

I would have nowhere to live if I sold my main house. I have a 2nd house though.

What about putting a lien on a secondary residence? My other house is worth $600k easy.

They can seize that if they want their money back. Would more lenders work with that?

Ok, so that 2100 was a conservative low rent estimate. A $500k house in the LA area should be able to rent for $2300 as a medium estimate.

if dscr is 1.25, then I should be able to get a loan for $325k, which is better than nothing. I'd take that.

who's gonna lend on that though?

yeah, the paid off properties can definitely serve as collateral.

But I'm wondering what interest rate I'd be paying for loans financed this way.

I don't want to pay loan shark rates.

which site is the best place to find a loan broker in LA? 

Should I just hit up yelp and zillow ?