All Forum Posts by: Donovan Keim

@Priyanshu Adathakkar that's what I was hoping would be the case, but I keep hearing podcasts and other discussions of people saying that you need to adhere to the SEC regulations for their criteria of (250k +income, 1 mill in assets etc..)  so I wasn't sure if that is over ever scenario or only for accredited investors etc. 

Hello everyone, I'm looking to make the move into getting investors to help me start my commercial real estate business. but I'm wondering what requirements if there are any on the paperwork and income. I'm getting ready to talk to family members to invest in my company but I want to make sure the all my ducks are in a row. for instance: if my aunt were to loan me $100,000 are there any SEC specific regulations that I need to follow or can it be just a basic operations agreement between my company and my aunt on basic payback stipulations, interest rate growth etc?

@Benjamin Clark I'd love to talk and see what other deals etc...maybe see if one is a fit.  send me a PM please

@Ozzy Smith i'd love to look at the deal you had in mind.  send me a pm or email me

Thanks all for the input, been very helpful.  I will be in touch!

no worries @David Sanford.  good luck in your ventures

@Shiloh Lundahl   using cash advance checks will get you the 0% but, I don't hear of a lot of people getting them like you do on a regular basis.  I'm a little surprised that you do (great for you).  using cash advance checks are different than going to a bank and getting a cash advance from the card that way, or going to an ATM, I guarantee the limit on that will be 10% if not close to it.  I wouldn't steak a deal on using CC's regardless, even if it was 0%.  but that's just me :)

@David Sanford As far as our HELOC's are concerned, I'm not 100% if we can go outside of our footprint, I can ask for you.

I will double check, but the last I heard we can refi/purchase on the brokerage side anywhere in the country.  I will talk to my MLO tomorrow and confirm.  typically we can cashout refi up to 2% without effecting the rate, above that the rate will take a hit.

cashout refi for a primary would typically be 80% LTV with DTI being 55% max and 640+ credit

cashout refi for a investment would typically be 75% LTV with DTI being 45% max and 640+ credit

(obviously the better the credit the better the rate)

@Danielle C. So there are a couple things that I would suggest.

First: If you try to finance it through your LLC, typically banks/lenders will only lend to you if you have been in business for 2 year or more, and then they will only be able to lend on 20% of your gross revenue. it will depend on what lender but most won't take the property as collateral under an LLC.

Second: If you try financing through your personal it will be safer, and you mentioned earlier that you would be scared to get a HELOC and finance it that way vs a cash advance on a CC. I will tell you there is less liability with a HELOC than a CC cash advance (also, a CC cash advance will only let you get 10% of your credit limit as cash (never heard of a card allowing you to get 50% of Credit limit as cash out) - so unless you have a 200k Credit limit don't think it will be helping much, also if you are trying to do the 0% for 12-20months you have to do that in the first 30-60 days of receiving the card.). For instance if you go through Huntington, and you get a HELOC (as long as you have equity in your primary, enough for the downpayment etc) the money you draw from the HELOC you will only be required to make interest payments. for example:

30k HELOC at 4% will cost you $95/month minimum

30k in CC cash advance will cost you (assuming a very generous 18%) will cost you around $430 in payments per month. 

so the cash flow using the HELOC even though it is on your primary is the better choice to get you started and maximize your monthly cash flow and minimize expenses till you either re-sell or rent out. once you do that you can pay it off and use it again. That is the beauty of the HELOC, you can keep using it as you pay if off. if you are adamant about having your LLC own the property, once you finance it personally, you can deed it over to the LLC, but getting finance from the get-go with your LLC will be next to impossible in my opinion.

I've never used a hard money lender, however, if you can get financing through a normal bank I would recommend doing it that way first, just because the rates will be better. If your DTI is tight that might be a reason to go the HML route though.

My goals right now are to buy rentals for the time being till I can afford some commercial housing and start down the commercial side.  1 step at a time, so I am working on building my capital and finding creative financing to allow me to buy my first rental.  I figured my first should at least be within driving distance of where I live to allow me to better manage it and get used to the process then venture out to other areas if need be.