All Forum Posts by: Henry J.

@Kristin Brancaleone

Hi Kristin,

I'm not sure if paying all cash would affect how you pick neighborhoods or your exit strategy. I think you should start with your goal, then work on market, location, price point, ROI, property class, PM, etc.

Part of reason why people investing in RE is that you have your tenants paying your mortgage.  Most people try to minimize the down payment so they can acquire as many properties as possible, and let the cash flow from all the properties to pay off their mortgages.  If you buy the rental without any mortgage, you are virtually buying an interest paying account with cash flow (rent).  If the market doesn't appreciate when you sell, you will be paying the 6% agent's fee.  With depreciation recapture and adjusted cost basis, I'm not sure how much $ you will be making after the tax bill and fees and make ready.  I'm getting ready to sell my 1st property so once I get everything done I can share more info.

Good luck.

Henry   

James P. I have had a few HOA assessed fines due to messy lawn so I asked the PM to contact them on our behalf to resolve. The PM had us signed a doc to represent us and they took care of the rest afterwards. If you have a good PM, they should be able to take over the HOA communication and bill for you. Also, check if the HOA has regular email communication which you can register to receive, so you get the HOA updates.

Depending on lenders - 6-12 months of seasoning, or you can look into delay financing within 6 months period. Also check with your lenders on their minimum loan amount. The fees can add up quickly.

Manolo D. I just googled small business loan and SBA shows similar requirements https://www.sba.gov/blogs/6-step-guide-how-get-business-loan They also suggest smaller local banks and credit unions. SBA loan info https://www.sba.gov/loans-grants/see-what-sba-offers/sba-loan-programs/real-estate-equipment-loans-cdc-504/cdc-504-loan-program-eligibility Forbe has similar business loan info http://www.forbes.com/sites/aileron/2014/10/02/7-steps-to-getting-a-business-loan/#5e8fe85421e5 Have you looked into local SCORE chapter to see if anyone there has experience in this? Good luck! Henry

I don't have any experience with this but I'm looking to learn as well.

Who do you bank with?  I have heard great customer service about First Republic and City National.  They will be my 1st try if I'm looking for a business loan.  If your company has been in business for a while and you have a good relationship with your banker, why wouldn't they loan your company money?  I'm guessing the loan will still require personal guarantee until the business has enough history and money flow to prove itself.  If your company hasn't been in business for a while then it will be based on your relationship with the banker to help prove your track record.

@Nicole Cotrino

wow. exciting posts with lots of opinions. i will throw in my newbie-the-world-is-a-flawed-one as well - with enough money, one can buy all the houses (SFR) in a neighborhood and sell them at whatever prices he/she wants. you can't do the same with stock, at least legally, or lotto tickets to change the odds, but you can certainly do that with SFR's... large corporations have kickbacks, grocery chains have slotting fees, government officials are corrupted, creative accounting, area 51, the list goes on and on. oh wait, did i offend everyone yet? :)

back to topic - i think if you are new to turnkey investing, and you need to vet the vendor, there is plenty of homework you can do before the 1st call.  a lot of information can be found online or sent via email.  most people are probably not ready to buy a rental house after the 1st call so it would make sense for them to set up 1st call to be 15-30 min.  there are plenty of tire kickers and i am one of them when i started.  we all need to respect other people's time (and time = $).  besides, what do you expect to get from the 1st call anyway?

from reading all the posts on BP related to Memphis Invest, it shouldn't be a surprise that the company is known for their customer service.  as you already experienced, they will give you all the time you need, and walk you through their investment proforma.  after you've done all your due diligence, it's up to you to figure out if the locations, prices and returns suit your needs (and expectation) before you buy. 

note - i'm not a memphis invest investor and i'm not a turnkey provider.  i'm just a turnkey buyer.

good luck on your search.

henry

Tom MacDonald Hi Tom, Are you buying it with owner occ loan? Unless you plan to live in it for a year, you will need to get an investor loan (~20-25%down payment). Another person already pointed out you will need PMI when you have less than 20% down. Mathematically speaking, when you have a low down payment, you will need a very good deal for the property to perform - either high rent to price (>>1%, low interest rate). Some of our DFW SFH's have HOA but they are ~300+/year so it still works. Another potential issue with HOA / condo is HOA putting restriction on your unit for rent. Some places will limit the number of units in HOA for rent. Good luck looking for your first deal! Henry

If you are investing in states with state income tax, you will need to file state income tax and county/city property tax (if not included in your mortgage escrow payment).

I think each state has slightly different rules on this so check with a local lawyer. Before you talk to the lawyer, make sure you have your survey done by a licensed surveyor, also know the date you discovered the situation.

@Quinton T.

I think it all depends on your goals and current situation.  If you just started and are looking to acquire more properties, then you would save the cash flow to acquire.  If you are done acquiring properties and ready to live off your holdings, then I guess you would start paying them off.  Some people may never want to pay off their mortgage but everyone is different.  I'm old school that I don't like debt so when I acquire enough properties I would plow all my cash flow towards paying off mortgages.