All Forum Posts by: Franco Li

First off, congratulations on getting what seems to be a great deal. I think you will probably have an easier time to source one lender who can provide you the full package, instead of securing 11 mortgages. Note that lenders will look at your outstanding debt and may change their times depending on your liquidity, so your first mortgage may not necessarily have the same financing terms as your 10th. I've noted on multiple posts with other people to look for local lenders or credit unions to get the best rate and structure, so should definitely look into that. 

Regarding (2) I think having 11 properties under an LLC makes sense. I don't know if you'll get financing through the LLC, and I'm sure many people have. If you are sole equity, you may want to speak with an attorney regarding legal protection because you will be labeled an ultimate beneficiary so it will be hard to say in a legal struggle, how much of your personal assets will be protected. Nonetheless, LLC will help your keep certain information private - especially if you are considering leasing out 11 units.

(3) I don't think you'll get any better terms for securing a higher # of units, but I think you should speak to your lender and see if that is a possibility - I really don't think so, but anyone who have done so can correct me. Standard LTV is 75-80% LTV, but again, if you shop around and look for a credit union, you may get even 85%+ LTV. Good luck, and I strongly suggest you keep shopping around and talk to lenders of all sorts and sizes.

I fully support @Dany Namou 's comment. I think following up is probably more pivotal than any step in the customer building/cold-call/business development process. I know 2% response seems very low, but considering that fact, that you can get a stranger to listen and hear your proposal is a feat in itself. 

My suggestion is to keep going at it and just make sure to followup respectfully and correctly. Best of luck. 

Hi Everyone!

I am the founder of a real estate analytics startup called DiviSmart.

As a real estate investor, I've found on numerous property hunts that investment-related information is not too obvious, and certainly not provided by many brokers/agents. DiviSmart wants to make real estate transactions as transparent as possible, so we work with both investors and agents to provide independent and unbiased investment analysis - think CarFax or a Moody's/Fitch Rating Agency for personalized real estate!

Agents use our services to promote an honest investment valuation on their listings, and investors tend to use us as a benchmark to validate these opportunities.

Here's one we did for an investor in Brockport, NY:

http://divismart.com/viewreport/divismart/61-westw...

Let us know if you or your team have any questions or is interested to learn more. We are re-pricing our business as we add additional features, and would be more than happy to explain more! Happy New Year folks!

Sincerely,

Franco Li

Co-Founder

I think politics definitely effect real estate investing, but a prudent real estate investor can navigate regardless. For instance, if you get a quality asset in a quality market, and have played your cards diligently in financing, I don't think politics and Trump's decisions will alter the rental market too much to effect you. Although, if Trumpism causes the next recession due to his ideas on de-globalization, and riles enough people to cause crazy riots, perhaps your property value will drop due to heightened crime rates, etc. But at the point, you should be more worried about your family and friends...

20% is not the requirement, although it is if you seek financing from national lenders (sometimes they even require you to do 20%+). Best strategy and advice I've received on financing, is to look at credit unions and local lenders which can do 80%+ LTV for your loan - i.e. you can put 15% down!

Moreover, if you seek financing through an LTV, many lenders won't allow you to do so but private, local, and credit unions again may have some flexibility.

The most important part of financing is to look into the different financing products that are out there, and educate yourself on the difference between and ARM and a 30Y fixed. More importantly, crunch the numbers and see which financing strategy works for you. My personal preference is to always get an IO of some sort, and do a rolling refi, but thats again my choice. Best of luck!

@Dahl Brandon

Hi Dahl! First off, thank you for your interest and time. I noticed you had some questions and relayed it to us via email. To address them:

1) Missing unit #s / bed #s 

- Our model examines the investment from an expected total revenue/month outlook vs individual unit $ generation. This is to make the process a lot simpler, especially for agents and intro investors, but we will be including this info or at least a tooltip in our next update. In fact some folks have already mentioned this to us, but a sizeable portion of our users are agents who use this as a marketing report attached to a zillow/trulia/streeteasy description.

2) Can't make changes on input data

- Yes, this was our intention (partially). Since we offer the report on a per report basis AND subscription, we lock certain initial inputs as way to mitigate folks who run the algorithm indefinitely. Of course, subscribers can do as many as they please. In fact, we chose to do it this way, in order for users to save multiple scenarios on their dashboard and be able to compare the ROI. Moreover, we perform sensitivity analysis on rental rates, so across a spectrum of rents, yo u can see what the ROIs across different investment horizons would look like.

3) Capex rehab cost

- We do have this input! Once you input some preliminary assumptions that are locked, there is an assumptions dashboard that you can play around with and generate as many results as you'd like. 

I hope this answers some of your questions, and I apologize that you've seemed to encountered some inconvenience. Email me at [email protected] and I can send you a promo code to try one for free so you can get the full picture. 

Cold calling has been the bane of our startup but also the driver to our scale. I would recommend this to anyone who wants to succeed! Best of luck everyone.

@Immanuel Sibero

Agreed! Sorry I was thinking more ROI than cap rate. My company works with investors who look more at 5/10 year ROI perspective vs cap rate, and from an ROI perspective - as you suggested especially in cities like SF an NYC - there can be substantial ROI despite negative cash flow; or as my team and I term it "betting on property appreciation". Understandably the cap rate is only looking at NOI, but that's only one side of the picture.

Sincerely,

FL

Hi! I don't see how dividends won't be counted as a source of income, but also it seems you have demonstrated that you have substantial liquidity held in stocks (liquidable) so I don't see why you would have any issue. Although, if you do have some income from a job, that would certainly help! What I do tell people quite often though, is that lenders typically look at your other mortgages (if any) on the other properties, and want to be sure you have enough liquidity to cover X-months of debt service for all your properties.

I suggest you go talk to a lender first and see what happens! Hope you get a solid rate before the next hike! Best of luck.