All Forum Posts by: Dustin Beam

FWIW, I went ahead and started the formation of my LLC today through LegalZoom. And, hopefully I'll be under contract Friday or Saturday, knock on wood.

So I know nothing about these guys, just came across their link via google search for KC commercial lending. 

I'm going to give them a call, but has anyone used them? Pros/cons? Their website shows fixed financing with potential for 85% LTV. Sounds really nice, but am curious if there are any pitfalls.

Here's their website. I'm not affiliated in any way for the record, so this is not an advertisement.

Sounds like collecting dropped marbles would be a breeze.

@Dustin Lauer my loans will be 80% LTV for 25 years. I didn't actually run the numbers to know 10% will or will not work, I was just trying to make a point.

Your point is taken as well though, and I appreciate the advice.

That's a really good point @Ed Emmons. And frankly probably all I need to hear in order to go the LLC/commercial lending route.

I hear people often talk about having an exit strategy. Usually when I hear it pertains more to the sale of the property. I assume that is not what you mean. 

If that's correct, let's assume mine (or your) mortgage rates go up significantly w/ the ARM. What options does a person really have besides switching banks? I assume, maybe incorrectly, that most banks will be within the same ball park of each other in order to stay competitive. If that's true, how would you exit without selling?

@Dustin Lauer why is it less scary now? I realize interest rates are different, but my concern is that the interest rates are fine now, giving me cash flow, lower down payment (20 vs 25) than traditional.....but my fear is that it goes to 8-10% down the line. At that point, I might be losing money each month. Is there legit reason to believe interest rates are going to be somewhat steady?

@Ed Emmons It's in an average area. It's difficult for me to make this decision. I'm basically going "all in" on 3 properties (should be signing contract very soon). My assets will be those properties. However there's also future wages from my day job. 

OTOH, I also plan to grow the business, which will eventually lead to commercial/portfolio lending at some point. If that's true, then it seems why bother putting any under traditional financing even if it is a "better" deal. 

I can't lie, I'm a little scared of ARM, but if that's an inevitability, then why shy from it now? That's my dilemma.

Which is more important to you?

From what I've gathered, it's basically impossible to get a nice, low 30 year fixed with an LLC. OTOH, then you're more vulnerable if you get sued.

So if given the choice, would you finance commercially w/ an ARM and LLC, or go traditional w/o the LLC?

I know there are "hidden" fees w/ purchases, but roughly speaking, you could reinvest that $275k back into real estate and get a complex (or whatever) worth around $1.3M. 

To me that would be awesome. YMMV

Just my $.02, nothing more. 

I'm still looking for my first property, but am in negotiations with 12 units now (fingers crossed). But, I started an excel spreadsheet like @Zachary Curry said. It started more simple, but then it got more involved, but nothing crazy. Although I don't have 20 years experience to test it out, I feel it is very good.

I basically set up inputs like purchase price, current rent, bank interest rates, etc. Then I found a link that gives average life for Cap-X items. I took average life of each and price of each and average them out for a monthly amount. Then I include things like future From that, I had it calculate down payment, cash on cash return....Pfft, I may as well just show a pic haha. Hopefully it's big enough to see/read