All Forum Posts by: Frank Maratta

@Tim Bradley

The few BRRRs I have done I have seen between 70 to 120% returns on a cash out refi at 70% LTV. Some banks will go higher then 70% but your interest rate suffers a ton. The best rate is attained at 70% LTV. Obviously if you go way over budget you may be forced to go with a higher LTV and higher interest rate. Honestly anything that returns over 50% cash-on-cash is a home run in my eyes.

Dont get a commercial loan. You can close in your personal name (or quitclaim it to your personal name if already in an LLC) and then quit claim it back to the LLC after closing. Banks technically frown on this, but I have never once heard them call a loan due because of this.

@Susan Millan

Out of curiosity why did you chose to build new construction rather than buy and rehab?

What did you project your costs at per square foot?

@Ari Bachrach

Buy an umbrella. It’s cheap insurance. Make sure you have solid primary insurance. stay away from excess markets like Lloyd’s with a bunch of exclusions. And stay away from ACV primary insurance.

@Cameron Philgreen

I don’t know much about this Turo app, but personally to me the risk and liability in the back of my mind of someone else using my car, as well as the inconvienance of renting it out would cause me is simply not worth a few hundred in cash flow monthly to me. Luxury cars are supposed to be a convienance, and just that - a luxury for us. They’re not meant to be investments, rather, maybe toys to reward our hard work from our investments.

The only time I’ve seen a car make an investment worth sense is my friend who bought an extremely rare 2015 Porsche GT3. I think he bought it for $125k if I remember right, drove it for a year or two and sold it back to the dealer for $125k because the car doesn’t depreciate like other cars.

@Chauncy Gray

When I have my closings and the banks make you sign all the papers for your mortgage there is a piece of paper in there that clearly lays out how much money you are going to be paying over the 30 years of your loan in terms of total interest.

The banks aren’t trying to hide anything, it’s just the cost of them lending you their money. Through leverage, we as investors, are able to accomplish some great things. No one lends money for free, a 4% return that the banks are getting is nothing compared to the 15% - 30% return you are making from renting out a small multifamily.

I agree that when you look at the big picture and the total interest you pay to the bank over the course of a loan it can be sickening. This is why I have all 20 year notes on my properties. It is Less cash flow but you will save a ton in interest paid to the bank. However for my next loan coming up I am going to be trying out a 30yr, I would rather have the cash flow now to invest in more properties. As someone said above, $1 now is worth more then $1 tomorrow.

@Freddy Hernandez

I just went through this. Duplex I was renovating had a tenant on the first floor. I negotiated a sale price of $100k cash but made the seller keep $5k in an escrow account until the tenants vacated. I gave the tenants $1000 to move out. It worked fine but I’m happy I had the seller keep money in escrow. The tenants children actually had lead paint poisoning come to find out, luckily they went after the seller, not me, and the seller ended up offering them $5000 to sign a release. I was able to convince the seller to put my name on that release form as well.

@Maria Luna

If you have equity in the property I would definitely reccomend it's own LLC. I create a new LLC for every 4 properties, and a new LLC for every property that is paid off. In addition I have a $4m umbrella.

Helps me sleep better at night. Bad things happen when you don’t expect them to. Be safer then sorry.

I just finished a two family rennovation and it came out beautiful (granite counters, SS appliances, back splash, the works), lots of interest from prospective tenants at the rents I have listed ($1850, and $1650- first and second units, respectively).

99% of these tenants are section 8. I know from dealing with section 8 in the past that they set what’s called a “fair market rent”. Out of this fair market rent the government pays a portion and the tenant pays a portion.

The problem is that I know from dealing with section 8 in the past is that they are going to be a few hundred dollars off from what I am asking for rent and their “fair market rent”.

I have lots of interest in the property, and all the tenants I have screened have offered to me that they will pay their portion of the voucher and the additional difference of what section 8 doesn’t cover, in order to get to the rents I’m asking.

I’ve heard of people doing this all the time, but Could this potentially land me in trouble with the government/section 8?

@Theresa Harris

Animal services did take the dog. But I believe she did get it back. Anyways I was lucky enough that she left on her own after two weeks because the downstairs tenant tried to sue both me and her.

The whole “emotional support” service animal thing needs to be controlled better by the fair housing authority. Almost anyone can apply for an emotional support animal and they don’t have to report it to the landlord because it’s not considered a pet, it’s a “service animal”. I had a no pet policy on this apartment, and sure enough, the tenant put “no pets” on her application.

What’s even worse is I had a friend who was leasing an apartment of his own and had a “prospective tenant” call asking her if he allowed emotional support animals. His response was “I’m not sure what that is but I don’t allow pets”. Well, turns out, that that “prospective tenant” was actually a feeler put out by the fair housing authority, and sure enough they called him back to let him know he was in violation of fair housing laws and discriminating against service animals. So moral of the story BE CAREFUL

@Theresa Harris

Animal services did take the dog. But I believe she did get it back. Anyways I was lucky enough that she left on her own after two weeks because the downstairs tenant tried to sue both me and her.

The whole “emotional support” service animal thing needs to be controlled better by the fair housing authority. Almost anyone can apply for an emotional support animal and they don’t have to report it to the landlord because it’s not considered a pet, it’s a “service animal”. I had a no pet policy on this apartment, and sure enough, the tenant put “no pets” on her application.

What’s even worse is I had a friend who was leasing an apartment of his own and had a “prospective tenant” call asking her if he allowed emotional support animals. His response was “I’m not sure what that is but I don’t allow pets”. Well, turns out, that that “prospective tenant” was actually a feeler put out by the fair housing authority, and sure enough they called him back to let him know he was in violation of fair housing laws and discriminating against service animals. So moral of the story BE CAREFUL