All Forum Posts by: Dr. Jordan E Smith

That is super helpful information that I didn't know! thank you so much! 

Really appreciate the response, it does help. thank you!

Just curious what other investors are doing regarding the short fixed interest period on commercial loans.. 

I suppose most would say that they wait to see what the market is doing at the time the variable interest rate kicks in after about 5-7 years but wasn’t sure what options are smart if interest rates are high and start to make the property less profitable, like refinance or selling etc.. 

thanks! 

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@Account Closed Thanks for the response. I am continuing to look for these longer term lenders. I also read that buying thru an LLC and applying for an SBA 7a loan is another option to get a fixed rate other than the heavy 2%-3.5% initiation fees they charge..

Hey all! 

I'm looking at an rv / boat storage complex in GA, and the numbers work for us EXCEPT for the fact that we are being quoted on a commercial interest rate that can only be fixed for 5 years. 

Wondering if anyone has any input or strategies on how to ensure cash flow stays positive if interest rates rise once the variable rate kicks in. Never borrowed commercial before so excuse the ignorance! 

Not sure if this is a standard deal with commercial loans having only a 5 year fixed rate and if so, what investors are doing to ensure returns stay positive once this period lets up and interest rates rise. 

Thanks in advance! 

Jordan 

@Jeremy Z.Great points. We still have a buyer - someone we know actually - who is willing to pay us original value of the home once she closes on her current primary residence. It's looking like we will also be able to get a discount on our new smaller primary home because we will be able to buy with cash. THEN we can HELOC that new place and finally get our first rental property under way this year. It has seemed like something keeps getting in the way but I'm determined to become a real estate investor this year hell or high water! lol Thanks for your input!

@Eric L.You make a good point and we are actually not looking to move far away from where we are now so the market is fairly similar as far as price fluctuations go. 

We considered using a heloc for downpayment on a new place but really do not want to have a mortgage moving forward to help lower our monthly expenses and help us get financially independent a little sooner. The other issue is the house we are in now is large and away from the major metropolitan area and would make for a better vacation rental. That market has taken a huge hit recently in my understanding but VRBOing it once this all passes isn't a terrible idea if we can't get top dollar selling it. 

Thanks for your input!

@Chris DeMello Thanks so much sharing your experience and advice! I have been leaning that way but it's nice to hear cases where it worked out well for the seller. 

And I agree, 1st position HELOC not second mortgage. Especially since cash flow is our major goal going into this.

Thanks for the response! 

@Jacob Sampson Thank you for your response. Do you find this true across the board for all mortgage companies ? Ours is with Mr. Cooper..