All Forum Posts by: Drew MacDermott

Edit: Must not have been on the correct page, i though this thread was 1 year old.  Will catch up with newest posts now. 

@Joe Villeneuve

Jumping on this thread after some searching for similar scenarios. Could you explain the business loan aspect? I'm assuming you are under and LLC or corp? From what you've said you have several "wannabe investors", say for the sake of example 5 people with $20k each, totaling $100k. If I am understanding correctly, you have a promissory note/business loan with each of them to use each $20k with as you see fit? Not having an LLC myself yet, how are the funds not considered commingled?

Do you also use delayed financing?

Great information in here. Thanks for the clarification!

Impressive, @Jeff Filali!  Keep it up!

@Charles Stubblebine There are likely several Real Estate Attorney's in your local phonebook. Or search the web.  Different RE attorneys may charge differently, so you'd have to ask them. You can first ask them how the process works and when they get paid.

Excellent! Keep pushing forward if you're serious then. If not this property, you'll find another great deal that fits your criteria soon. Let us know how the adventure goes!

@Jeffrey Gagnon sounds like you're on the right track with the current lender. Leveraging recommended contacts are a good way to go. @Rory Cummins also had good advice above about investment criteria. I'm on mobile now, getting used to the BP app, sorry for the late mention! Perhaps 3-4 units don't work well in your area, for whatever reason. You could do a quick search on your own for 3-4 unit properties that have sold in the past 6 months or a year. If your potential investment area is a larger town, they'll most likely have an Assessors website where you can search the town records. I'm on mobile now, but 99.9999% sure Omaha would have an Assessors/GIS database, if that's where you're considering after moving back from Japan.

your offers will need to be tailored based on your personal criteria.

@Jeffrey Gagnon have you only contacted one lender? I'm not familiar with VA loans but generally up to 4 units are still considered residential properties, not commercial, and can use conveniently financing. Can you expand your lender options? Regarding your buying criteria, you have already decided to find a duplex, great! You should also have minimum requirements for your cash flow. So, after expenses, cap ex/repair & maintenance contingencies and debt service, how much do you want to cash flow? $100? $200? $500?

@Robert J Carlson sorry, to clarify, I had meant as an investment property instead of "non-occupied".  Thanks again!

@Neal Badru Thanks, the $150 would give us that flexibility to pay-off or for repair funds.  We're ironing out the details this week. 

Thanks for your feedback, Gents.  

@George Taylor I don't know if we are comfortable yet using the lease option at this time, but we will do more research into that for future deals. Seems like a good strategy to help buyers also. Do the Dodd-Frank rules still apply to this though?

@Robert J Carlson We have our running shoes on now and are talking with the bank about 15 vs 30 year refi's.  They are quoting 4.5%, 15-year & 4.8% 20-year as a non-occupied property.  Are these reasonable rates?  I'll also call a few other banks to see if they possibly have any better rate.

Let me preface this post with this was our first deal ever and didn't really know what we were doing. My friend and I purchased a 750sf SFH during college in May 2007 at full price of 68,000, 100% financed at 6.375%. Skip to 4th paragraph for my ultimate question of best refinance option. We haven't done this before and are looking for advice. We know this isn't a great deal, but would appreciate your input.

We were looking to live in the house instead of paying for room/board during school then rent after graduation. The home needed renovations at the time so we did a complete gut by ourselves, with the help of family and friends, totaling approximately $12,000. Seemed like fun at the time - so much for buying it right, but we've learned a lot since then.  We have broken even so far at this point in time and will take the experiences so far as paying for our School of Hard Knock education.

We've managed the place ourselves for the past 10 years and had no major issues up until beginning of January 2016.  At that time we found the sink cabinet was water damaged and replaced it (still not 100% sure if Tenant, we took the hit on it), sewer line backed up due to roots and had costs associated with jetting & roto-rooting sewer and hot water heater replaced.  June 2016 repainted the interior and other minor maintenance in preperation for sale, however 2 contracts have fallen through and we are about to have our 3rd fail (with Possession Prior to Closing to make the situation more complex now). Due to trying to sell, house was vacant June-November 2016. 

We are now exploring renting again since selling the house hasn't worked.  We simply forgot about our interest rate in the past (won't make this mistake again) and are now looking at refinancing our current loan (6.375%, 20 years left) to one of the following options.  Without getting into too many numbers, a 15-year will keep us at current cashflow, 30-year will save ~$150 but will obviously put us back on a 30-yr schedule increasing interest owed again.

1. Current lender offering no-fee refinance at 15-yr, 3.875%
2. Refinance with another local bank 15-year, about 3.38% APR (most likely will be higher % due to non-owner occupied, maybe 3.8%?)
3. Refinance with another local bank 30-year, about about 3.6% APR (most likely will be higher % due to non-owner occupied, maybe 4.0%?)
4. Continue to push forward on selling with a documented pre-qualified buyer.

We are leaning towards the 15-year refinance.  Should we be leery of the "no-fee" refinance with current bank?  Do you have other suggestions?

Sorry for the rambling, but we greatly appreciate any input you have!