All Forum Posts by: Gary Guidi

@Gary Guidi sorry for the new guy question, still in learning phase.

Are there any situations, outside of anomalies, that a bank won't refinanance with you a bit down the line?

I sure hope not.  If the lending market freezes for some reason it'll hurt all of us.  I was in residential mortgage lending during the great recession and I definitely remember products disappearing from the market.  There was basically only the 30 year fixed option available.  Appraisers were slashing values everywhere.  Dark times.  I don't know how multi-family was effected in 2008 and 2009. 

@Gary Guidi when you refi what equity do you plan to pull out and how will it effect your monthly cash flow?

Let's say the building is valued at $1,800,000. And let's say I cash out at 75% LTV with agency debt at 4.25% (depending on rates at that time). I could pull out about $300,000. It would raise my mortgage payment by around $300 per month. My rate now is just under 5.00%. I can use that $300,000 for down payment/ improvements on another property. I could purchase another building in the $900K-$1M range and cash flow more significantly more than the higher payment on property #1.

@Gary Guidi

Wow Gary, congrats to you and your family, thank for sharing... any advice for any newbie that wants to break in to the multi-family world.

If you're trying to break into multi-family, I would start with a good mentor program.  

@Gary Guidi not a lender... I’m an investor, RE Broker, and GC.... the context of my question is from an investor standpoint (learning from the community) and curious to know if you had a prearranged setup w the original lender about a future refi and them wanting to keep the note in-house and would oblige... I’ve had banks agree to this strategy on SFRs and MFs under 4 units, wanted to know if this was possible w larger MF

Understood.  Here's what I can tell you from those previous questions.  I'll copy and paste from your other post.

What do you forecast the appraised value to be in 1 year when you refi? If the trading CAP rate remains the same as when I purchased, it should appraise for about $1,775,000. I plan to talk with my AIA agent who sold me the property and get his insight to the current values in the area and show him my rent roll. So we'll see.

Did you discuss w US Bank that this is your strategy? Yes and they're not into refinancing down the road.  They don't have a pre-payment penalty but they do have a gap funding fee depending the rates at the time of payoff.  I'll have to see if that effects the payoff at all or to some degree.  I was working there at the time so had a good relationship with the commercial loan officer.  I also received some employee discounts.  He really held my hand through that first deal with I appreciated.

If so, did they give you any input to refi the note w them?  As I said they really don't have an appetite for cash-out refinances.

Or are you planning to do the refi w another lender?  I'll pursue agency debt next time since the building is now stabilized.

Are you planning to recoup all of your equity when you refi? - I'll recoup as much as I can and re-capitalize.  

@Gary Guidi Congratulations Gary. Numbers look great. Sounds like you found a winner. I know the post says first multi-family, but I think we are all eager to hear if you have a background in SFHs prior to such a big multi? 

Do you mind if I ask if you had to do anything creative to come up with the down payment (borrowing, equity partner etc..) or was it just cash?

Nothing creative about the down payment.  Just had to convince my #1 investor (my wife) that it was a solid plan for us to invest in.  And that was NOT easy but is working out. 

@Gary Guidi

That’s pretty sweet. One day I want to be like you when I grow up. One day I will be there.

It’s got to feel good to have a $7500 a month passive income coming in every month. Go ahead and do your pimp walk. We ain’t judging.