All Forum Posts by: Ed Matson

If I were the investor, and it was a loan, I would want monthly payments.  Regular cash flow is a beautiful thing.

Aside from the resale consideration, what will the impact of the location be on maintaining high occupancy with good tenants?

@Davidson Francois - Sorry for my mistake.  But the same comments apply, but to the electricity, not the water. 

Exactly, @Bjorn Ahlblad

I would look at the volume of water/sewerused in the 12 months prior to washer installation and get a baseline set and agreed to with the tenant.  Anything above that, you pay in the form of a credit given to the tenant to be used against his rent.  Tenant provides you copies of water bill. Can be done on a quarterly basis to reduce bookkeeping time.  No need to put in a separate water meter.

Try "What Every Real Estate Investor Needs to Know About Cash Flow" by Frank Galinelli who teaches at Columbia in its graduate RE program. And what other factors do you think would be important besides cash flow? Commercial RE is all about cash flow. Property valuation is based on cash flow (NOI divided by Cap rate). If you increase cash flow without a corresponding increase in operating expenses, the value of your property increases and you force appreciation. So, IMO, its all about the cash flow.

Have you checked HotPads, Zillow, and Trulia? HotPads has a good mapping function.

@Danny Kao - Often the T12 and rent rolls are only provided as part of the due diligence process after signing the purchase/sale contract. Many owners don't want to disclose their personal business to folks who are just looking or evaluating deals.

@Jon Schwartz - Anything 5 units or over is normally subject to a commercial mortgage.  As such finding a 30 year fixed rate mortgage is out of the question unless it comes from private money like owner financing. Common commercial multi family mortgages have terms between 5 and 10 years with amortization schedules from 20-30 years.  Fannie Mae has a small balance loan program with a 15 year fixed and a 30 year amp.  Not sure if this property or you would qualify, but that's the best I've seen for small commercial. Suggest you reach out to a commercial loan broker. They can provide multiple options and save you tons of time. A 20% down payment is pretty light.  Many lenders will require 25%.

@Steve Weinstein - If you have a choice between a cash out refi and a HELOC, I would do the cat out REFI. Interest on HELOC's now are only deductible if used to improve the property subject of the HELOC.