All Forum Posts by: Geordy Rostad

@Dirk J Mc Kenzie

One more really important thing I missed is that some commercial lenders such as credit unions only want to loan on properties within a certain physical distance of them. Often the lender you are speaking with will already know about the property you ask him/her to lend on. They will get in their car and drive by it if they don't. Others only want to loan to local investors. If you are a local investor trying to purchase a local property, it's much easier to get them to take a chance on you than it may be otherwise.

@Wei Cho

Sorry to hear your first deal didn't go so well. Don't give up! If you stop now, all those lessons you just learned will be for nothing.

Please do share some of the problems you ran into with your deal. It sounds like your vision for this property was too ambitious?

@Dirk J Mc Kenzie

What you have heard is more or less true although there are exceptions. In some cases you could financial an 8 unit apartment complex with two conventional loans if they are split up as 2 fourplexes on two tax parcels for instance.

Alternatively, you could finance a 2-4u with a commercial loan in some cases if that makes more sense.

Aside from these exceptions, the qualification process is completely different. With a residential investment loan, you'll have to meet guidelines just like for your primary residence. Lots of rules layered upon other rules. Conversely, if you are moving into one of the units, you could use an FHA loan and potentially put down less than 5%. You won't find that with any commercial loan I know of.

With commercial loans, forget everything you think you know. Every different lender you speak with will most likely have wildly different rates, LTVs, amortization schedules, prepayment penalties, etc that they are offering. You have to ask and understand ALL of the terms of the loan. You won't really be comparing apples to apples. Someone might offer a 65% LTV, 20 year amortization at 5.5% interest but then the bank next door might offer you 80% LTV, 30 year amortization at 4.2% interest with no loan fees. You just really never know. Commercial loans rely far more on relationships with commercial lenders. One thing the commercial lender will want to see is experience. If not experience, they will want to see that you are hiring someone experienced to manage the property.

@Devin Washintgon

Definitely not without explicit permission. I would lean towards not at all unless there's a good spot for it that isn't through your roof shingles.

Google "dish install roof leak"

@Angelica Rivera

Reaching out to one owner about one property probably won't get results. Cold letters and calls are a numbers game. You might get 10 responses for 1000 tries and maybe close a deal or two.

In my area, there is a builder who tied up a bunch of properties and then committed some sort of fraud and ended up in jail. Investors reaching out about his properties are probably not getting responses. The reason could literally be anything. It's hard to even be sure your communication attempt ever reached the intended target. Just keep at it and don't fall in love with a deal you don't have yet.

@Waylen Herdman

Second deal sounds better to me. If for no other reason, the fact it's in a better neighborhood. Another reason is that it will be vacant and you can pick your own tenant there. If there's no houses under $100k within a mile, why do you think the ARV is only going to be $80-$100k? If you can't get more money out of the house because of the shop, you could always rent that part separately to someone else.

@Armani Emon

They might be or they might not be. You just have to ask.

@Armani Emon

This is a widely used strategy by both real estate agents and wholesalers. Sometimes failed listings have later closed "off market" but you should be able to see that on Zillow or Redfin under sales history.

@Tyler Hill

Zillow's pricing algorithm is a big trade secret but there's a few things you can tell from the outside that can cause differences:

1) A low previous market sale on the subject property

2) Age of the property

3) Inconsistencies in the tax records such as improperly reported square footage, bed/bath count, and lack of garage, etc

4) Property owners can update Zillow manually to reflect things such as a big remodel or incorrect tax records

@Nick Perez

You should be able to take a piece of it to any supplier or retailer who sells countertops. Maybe Home Depot or Lowes but I would probably try something more like this https://www.fkbdesign.com (I know nothing about these guys, just Googled them).