All Forum Posts by: Fred Stevenson

@Chris Mason.  Thanks.  That's a strategy I'm considering, but it won't let me grow as fast as I'd like

@Jackson Long thanks for the response. That's what I thought it meant, but then that raises some other questions.  What happens if you want to sell one or refinance one of the five properties?  Does having one loan backed by five properties create issues with this?  Also, would all five properties need to be in the same state and under the same title holder's name?  Also, this still leaves one with the big problem of what happens at the end of the fixed rate portion of the loan?  The above poster said you could refinance, but what if the rates are much higher?  There are plenty of investors on BP who claim to own a town of homes?  I'd love to hear how they got there. Finding homes with owner financing or subject to seems like a job for a full time real estate investor, not a part timer like me. 

@Mark Allen Can you elaborate on commercial loan in groups of 5+?

Welcome to BP.  It's a great resource

So for those investors that have accumulated 20 + homes, I'm curious how you continued to get your financing after you used up your ten personal loans.  Did you start using commercial loans to buy your properties after your first ten?  I am almost at my limit, and I'm trying to plan for the continued expansion of my portfolio.  However, most commercial loans that I'm familiar with are usually come with a slightly higher rate that is fixed for five - seven years with a 20 year amortization schedule.  My fear is what happens once the fixed rate period ends?  It's hard for me to imagine that rates won't be much higher in six or seven years than where they are today?  If this is how most people are financing their investments to expand their portfolio what about the risk of having a short term fixed loan?  How are people mitigating this risk, and what are other alternatives onces I've hit my limit of ten personal loans? 

I'm also considering buying flooded properties, but here are my thoughts and concerns.

1) What will future flood insurance costs look like? I've heard that flood maps will not be redrawn quickly, but that it will take years. Therefore, there may be an opportunity to get houses for a good deal and help the thousands of displaced people get a newly rehabbed home to rent.

2) How many people will decide to leave and not come back?  

3) I fear buying a flooded house in a neighborhood filled with tons of other empty houses.  Let's say I rehab the one I buy, and then half the neighborhood doesn't come back or takes two years to return.  What does that mean to the future value of the home?  While I think I may be getting a deal, I may just be paying the new market price for the home that will not appreciate for years and years.

4) What does this flood due to the macro-economic picture of South Louisiana. It's hard to get my head around the idea that only about 10% of the people in 60,000 flooded homes had flood insurance.  In my mind, this is going to bankrupt a ton of people.  Those that don't go bankrupt will have to put all of their hard earned money into their homes and have less disposable income which will crush the economy around here.  

5) Real estate investing 101 - invest in the path of growth.  Is Baton rouge going to boom with all of the reconstruction or go bust due to the drain on resources of all of these flooded home-owners?  

6) Is the an investment opportunity of a lifetime or a risk that will result in future dread?  

@Zachary Scott, I recently had a home inspection done during the Winter time frame. Then I purchased the house located in south Louisiana and renovated the house. Tenants were placed in the house in the Spring. About one month into it, the tenants called my property manager to let him know that the temps wouldn't drop below 80 degrees.  It turns out that the AC unit didn't have enough power for the size of the house, so my property manager recommended that I replace the unit.  It costs my 5k, but I knew it was the right and only thing to do for my new tenants.  Last week, my property manager sent me a picture of a brand new fence that my tenants put up in my backyard at their expense.  I guess it pays to do the right thing, sometimes.  I have a happy tenant, and they just helped improve my property.  

I think you should forgo the AC units, and fork over the cash to upgrade the central air.  It's the right thing to do.

I'm looking to find one company that can do a cash-out refi against the equity I've built up in multiple properties in different states through one loan.  I came across Dwell finance, BR2, and Fox commercial capital.  Does anyone have any experience with these companies, or are there others that you can recommend?

@Wayne Brooks, I meant to say "lender's title insurance", rather than, seller's.  My bad.  Thanks for the advice.  Is this kind of insurance purchased from the title company?  What is a typical purchase price?

I'm looking at a new purchase, and the purchase agreement recommends that the buyer purchase buyer's title insurance. Does anyone recommend getting buyer's title insurance or is the seller's title insurance sufficient?