All Forum Posts by: Dustin Beam

I like to point out that I'm new so you know I'm not an expert, but I just formed one (in process actually) and the bankers I spoke with didn't allow an LLC to own the property of using traditional financing. Commercial lending does, but the loans are structured differently. Personally, I decided to go commercial and have an LLC.

It worked for me @Ann Howell. I was probably luck though, it was only up a few weeks before I got a call. I was prepared to keep bumping it up for a year or so before I found something I wanted.

@Justin Fox I hope it works out too! I'm all in on this deal, selling my house, moving in with my girlfriend, all savings, etc. Pretty much all going to do this.

@Matt Grace It's in the Kansas City metro, Missouri side suburb. Funny enough, thanks to @Brandon Turner and @Joshua Dorkin and their podcast quick tips (I think it was a Quiiiick Tip anyway), I posted an ad on craigslist about buying rental property. I got a call. This after years of looking at the MLS, craigslist, etc. Ha! of course, I found some deals before that probably would have been solid, but for different reasons, I never pulled the trigger.

20 year ARM, adjusted every 5 years. That's a bit scary for me since I'm not used to it but figured people make it work, so I can too. 4.25% for the first 5 years.

Taxes are around $7-8000 per year total. I used actual values in my analysis, but don't have them in front of me. Insurance was quoted at $400/mo for all.

And yes it's exciting, but I'd be a damn liar if I said it wasn't scary too! haha 

All gas, no brakes baby

I'm new like you and I just went under contract buying property with a seller somewhat similar. Difference was that he wouldn't go under contract until I had approval from my bank. So I formally applied for the loan prior to even being under contract. My bank allowed that so that's what happened. 

There were other hoops I had to jump through that I considered "non-traditional" but basically had everything done up front outside of an appraisal. It was a risk on my part, but so far it has paid off.

Good luck!

@Paul Timmins Thank you for the advice, I will definitely keep that in mind.

@Dawn Brenengen Well I hope so because it definitely feels like I'm going in head first! haha

@Justin Fox I figured I'd just post your request here. The purchase is for three 4plex apartment buildings. So I could have done traditional financing, but I opted for commercial primarily because I wanted them to be owned by my LLC. It didn't hurt that commercial allowed 20% down and not 25% like traditional would have required. Like a lot of people, the hardest part is to come up w/ the capital to buy.

11 of the 12 units are full renting for $650/month. The 12th, I was told, has a tenant moving in with a signed lease. Cost for all 3 was $525k. 

What I like most is that each apartment has 2 BR each w/ their own bath and walk-in closet. Building is around 30-35 years old so it's not perfect, but definitely not terrible. Separate metered gas and electricity.

Should be a solid deal but only time will tell. 

@Justin Fox I'll PM you sometime about the details.

@John Clark Yea, this was a commercial loan. However, it's multiple buildings so I could have qualified for traditional financing. Although enticing, I ended up going commercial anyway so that I could have an LLC. And yea, I suppose there's just "news", but when it's my first, it's pretty nerve racking. I mean, it will probably change my life (hopefully for the better). So it's hard to take whatever happens in stride! :)

Man, I wish this was all easier on me. haha I imagine in the future it will be. But I'm supposed to meet the seller today to sign a contract on 12 units. 

It's been a long road as they are FSBO, so all negotiations have been done directly with seller. I'm waiving inspection rights (already had it done). Bank has already approved me. Basically only contingency is appraisal.

The thing is, since I don't own any rentals now, I'll be trading the "I hope it happens" stress for "I need to learn more about the day to day of being a landlord" stress haha. It's a good thing though, but not good for my sleeping habits! :)

I'm currently new to this and am also trying to buy some FSBO multi family buildings. Fingers crossed, I hope to go under contract tomorrow (but there are still things in the way). Not to hijack, only as a background to show I'm in a similar situation as you only a little farther along.

I can say that the most stressful thing to try an iron out so far is all the paperwork. Who does what? What language is needed, etc, etc, etc. 

OTOH, paying even 1% would seem out of hand IMO for $500k worth of real estate (I might feel differently if I miss out on the purchase because of paperwork though). Not sure what your purchase price is, but if you could get it done for a thousand or two, it might be worth it. Also, you might be able to get the seller to pay for it by paying that same amount more for the purchase. It shouldn't affect your monthly payment by much at all.