All Forum Posts by: Dylan Favazza

Thanks for this @Sean Bramble! Will go through these, most on here I haven't heard of yet. Appreciate it!

@Ned Carey Also appreciate the other bank recs. I'm going to inquire right away! I thought I reached out to them all, but hadn't tried Lima One or Lending One. Thanks!!

Appreciate this response and good to hear that this isn't crazy high historically...I've only been investing during this low rate environment we've been in the last couple of years. 

I'll look at other banks. I couldn't get anyone at Dominion to talk to me, probably sent 5 emails and called several times. 

Credit is excellent, and I did consider a great LTV...but I'm wanting to continue to grow as aggressively as possible in the next 6-8 months and decided to do max cashout to help me accomplish this.

Thanks again for the help!

I just recently used my 10th Fannie/Freddie mortgage so I’ve been diving in to learn about my lending options moving forward. I spent the day yesterday calling local banks and here’s the decision I’m trying to make:

I have 4 properties I want to cash out refinance for total appraised value of $426k (I’m in saint louis). One property is $75k, two around $100k and the last at $150k, all single family.

I’m 95% of the way through the refinance process with a company called LendSimpli that can offer me a 30 year fixed rate, 3 points at a 7.25% interest rate as a portfolio packing all 4 together. A crazy high interest rate but in todays world I feel like a 30 year fixed debt is a much safer move than a commercial loan with a 3-5 year balloon. My local CU can offer commercial terms at 4.25% interest, 20 year term with no points but a 3 year balloon.

So when I pencil it out my total return is better with the CU

-a lot more debt pay down overtime

-monthly payments a little less, so more cashflow

BUT I’d have to start the process over again AND in 3 years rates are certainly going to be higher and who knows where the market will be. I am thinking that it’d take the Fed raising interest rates A LOT more times for my rate in 3 years to go from 4.25% to 7.25%, but what if the value decreases?

Need some help or advice on this and maybe someone to talk me off the ledge on a balloon note. I’m not opposed to it and actually have a couple commercial loans now, but I’m concerned with putting more of my portfolio into loans that will balloon with how unpredictable things are right now.

On another similar note, I’m in final stages of negotiations on another 5 property rental portfolio that’ll put me back in the same situation except at the time of sale. Maybe I just do this refinance with LendSimpli and the new purchase with a commercial loan?

Anyone have advice, or maybe even a better alternative? Thanks!!

Appreciate the thoughts and advice here @Tom Degroodt

@Mike Dymski helps a ton, thanks for breaking that out! 

@Colleen F. Super helpful! Updating my books now with a subcategory under vacancy for turnover costs. Great points, appreciate the quick tips

@Dave E.

Thanks Dave! Makes sense, definitely helps simplify. So for accounting/tax reasons, do you actually put a line item expense for # of days it’s vacant? And do you calculate it off the old rent rate or new rent rate? Is lost rent a tax write off?

*newbie forgive me, this is my first tax year.

I might be getting too granular, but I guess I’m also looking to see the “true cost” of a vacancy. I always put 5%-7% when running my numbers, but what is it really? A lot of extra trips and extra expenses are incurred around a vacancy. I’ve been fully occupied the last two months and I’m amazed looking back at how much time and money I had been spending on little things to finish and fill a unit.

Also, what else am I missing that should be tracked in vacancies? 

-mileage driving to the property to check on contractors, HD trips, driving over to show the unit for rent, etc. 

-Expenses for listing the finished apartment for rent

Hello BP!

I'm new at investing as of this year and need some advice on how to track vacancy expenses. I'd like to look back on my first year and see what I spent on turnovers & vacancies....but so much goes into turning over a unit so I'm struggling with how to categorize my expenses. Here's some examples:

# of days the unit sits vacant - does anyone calculate the rent rate * number of days vacant and put that in as an expense? you're not really paying it as a bill, but it's lost income. I'd like to see this number at the end of the year, but not sure where to put this?

Capital Improvements - I've spent a lot this year improving units during vacancy turnovers. Obviously, these are long-term improvements on the property, but they were caused by a vacancy. Do I track this as a vacancy expense with a sub-category for capital improvements, or is that doing too much? There are also bigger expenses I did like put in fans, redo floors, etc. that are longer-term improvements, but then I also did small like blinds that will probably always need to be done between vacancies...do these get categorized differently?

Utilities during vacancy - is this a utility charge or a vacancy charge?

I'm trying to organize this the best I can in year one so I can know moving forward knowing what the true cost of a vacancy is. What do you all do? Any advice is greatly appreciated?

Would also take referrals for a good bookkeeper! Realizing now that I'm spending too much time with this, thanks so much!!