All Forum Posts by: Dave Anstatt

I have HELOCs with Bogota Savings Bank on both my primary and one of my investment multi-family’s.  If I recall properly they are both 10 year terms with 15 or 20 year payoffs.  That is to say I can draw on them for 10 years and after that the remaining balance transfers to a fixed term loan for the balance of time without the ability to draw more principal. Bogotá’s main branch is located in Teaneck, NJ.  

Once you have a deed in a corporate structure (i.e. LLC etc.) the banks consider it a commercial property and will not in my experience lend under traditional consumer residential mortgages. I have a number of mixed use properties and some strictly residential in LLC's and they are all financed with commercial loans. The loans are typically structured as a five year term with rate adjusted every 5 years thereafter amortized over 25 years. The current rates I have are 3.75 - 4 %. I've built a very good relationship with a small North Jersey bank's commercial lending dept. and have used them on 4 cash out refinances over the last two years. I've been happy with their service so far and plan to continue to use them as each loan has gotten a little easier as they gotten to know me over time. The downside is their fees are pretty high including environmental studies, commercial type appraisals and their bank attorney fees. I've sought out credit unions offering commercial lending and have one of my properties financed through such a credit union, so you may want to check into that option as well.

Feel free to reach out to me if you'd like to discuss this further.

I’ve used Glen Rock Savings Bank to refinance some of my mixed use properties in East Orange and Newark.  Very Responsive and a pleasure to work with.  Dave Zurheide is the VP Commercial Lending. PM me and I’ll share his contact info.  I also have used Valley Bank and  Bogotá savings Bank.  Let me know if I can be of any further help.

@Rigo V. I've used Credit Union of NJ (CUNJ) for a HELOC. They are located in Ewing, NJ. I've spoken to their commercial lending dept. regarding portfolio lending and will be refinancing some properties with them shortly. They meet all of your criteria. Best of luck

Dave

Hi all,  

I' do about three flips a year, have a portfolio of rental properties and have purchased another 2 (soon to be 3) hold properties this year.  I GC all rehab work myself while also doing much of the in house carpentry.  On top of this I manage several properties while trying to lead  a meaningful family life.  Although it's been working out very well financially, I've come to the realization that I can't continue this way  something has got to give and it's becoming apparent what's giving is my sanity.  I've learned here that developing better systems, delegation of work/ responsibilities and building a team is the only way to maintain or increase project flow with the goal of achieving a better quality of life.  I've gained a bit of a reputation locally as a quality rehabber.  With this a number of friends and acquaintances have approached me with interest in partnering or money lending on projects. And recently I'm being fed leads on a number of good properties.  I'm reluctant to take advantage of these opportunities as I fee I just don't have the capacity to handle more than two to three at a time (even that's a stretch at times).   

My team consists of myself and a lead carpenter. He's very skilled and capable of everything from roofing to finish carpentry. I've also got a realtor friend who's fed me deals and gaining inroads with Bank REO's and has out right asked to partner with me on deals. Both of these guys are good at what they do and have expressed interest in "getting involved" in the REI business. Both have little or no money to invest. I'm at a point where I need to build this thing into a more productive, streamlined operation and may have two individuals in my midst to help me do it. The realtor can feed me deals and he's got a genuine interest in learning the ropes and help out in a some of the leg work (scheduling, inspections, oversight, etc.). The carpenter has run his own company and managed many projects. He would be an ideal project manager while still being able to put the tool belt on.

My question is, how can I go about incorporating them into my REI operation to everyone's benefit? They would each like some equity, but I'm taking all the financial risk. I've discussed with some REI's who wouldn't give up anything without a financial input. How have others partnered with such individuals in their own business? Thanks for any insight you may have.

@Ian R., I used private money on one and cash on the second.  My experience on these Auction.com purchases was that they took long to close and because there is no seller contact (banks in both cases) it was hard to find out what the delays were stemming from.  I believe in the end they were due to the slow nature of the foreclosure process in NJ and in at least on case the bank hiring and then firing at least on attorney in handling the foreclosure.  Her's a brief synopsis of the deals

1. SFR listed as occupied on the auction listing. This was in fact not occupied, the bank had changed the locks and hired a management company to cut grass. collect mail etc., but still considered it occupied and would not grant me access. I actually showed up on the day I won the bid and ran the property management rep. who told me he was there to repair roof and do a cleanup of the furniture etc. I figured I had hit the jackpot, only later to find out his bosses eventually told him to basically take pictures, winterize and move on. I suppose they were notified of the impending sale and told to hold off on scheduled work. Anyway, this was on May 5, 2015. After countless contract extensions and requests on my part to Auction.com and title company contacts as to what the hold up was, I finally closed in early Feb 2016. That's right 9 months. Very frustrating in that they would extend for 30 days, which seemed reasonable the first two times, however each time the date came and went and then they laid another extension on me. I had the opportunity to kill the deal and get EMD back, but I kept at it as agonizing as it was. In the end I netted 65k after construction, interest, closing and holding costs.

2. SFR listed again as occupied. While growing impatient on #1 I came across this one bid low and got it. I won the bid at $101,320. It's only a 2/1.5 but the purchase price was too good to pass on and I won the bid. This one however was truly occupied. I won the bid in Sept. 2015 and the closing was delayed (again a number of extesions) until Feb 2016. I tried cash for j\keys to no avail. I had to file for writ of possession, hire an attorney and go through the long process of evicting the former owner. Long story short, i moved them out Sept 30th 2016. I'm just finishing up the rehab with plans to list it just after the new year. If my prediction of the market is correct I should net $100k-$130k on this house after expenses.

So, this is my experience with Auction.com. Long delayed closing after winning the bids.  What's not included in the profits above is the opportunity costs in tying up funds for such long times.  This might be viewed as crazy by some, but for me with having other work as a contractor, managing my rental  properties coupled with the profits, I feel it was worth the pain. 

I'm interested to know of others experience with Auction.com specifically on "occupied" properties.    

I've bought two properties earlier this year through Auction.com and on both used the sellers closing company which is where I sent the EMD. I'm currently the winning bidder on another where the seller and Auction.com have agreed to allow my attorney hold the EMD in his trust account. I just needed to send the wire verification as part of my documentation.

Although I'm not yet at VIP status like @Jean Norton, A.com has waived the required deposit money on all bids for me.  I guess I've arrived at some status level based on my previous purchases.   I understand there are other benefits to VIP as explained by an A.com rep who stated I needed to purchase 5+ properties/year from them to get there.  Does that sound right @Jean Norton ?

Shmuli,

What do you have?

Very inspirational.  Sounds like you've got a good system going.  Keep up the good work and best in the fluture to you.

@Kevin Hill

I have a couple off market properties in Maplewood that may be of interest to your client.  PM me and we can discuss.