All Forum Posts by: Geoff Garrett

Thank you @Spencer Gray

Thank you @Erickson Sainval

Hey guys thank you for the responses.  

I don't think I explained it properly.  

I will be the sponsor, so I need to write about my experience etc.  I didn't know if anyone had examples of what a background on a sponsor looks like, so I can use it to format my own.

Thanks!

Hello,

I am looking to move from residential multifamily into the commercial multifamily.  I started working with a commercial loan broker to see what size loan I would be able to qualify for.  Aside from the standard financials they are asking for background on the sponsor.

I didn't see anything on the forums for examples and my google searches kept bringing up how to apply for sponsors. 

Does anyone have examples or places to go to see examples for Sponsor background?

Would you recommend asking the lender for examples or is that frowned upon?

Thanks!

@Selena Harrison

What did you end up deciding with this?

Geoff

Selena,

Can you tell us a little more about your situation?

What are you going to use the money for and how long do you need it for.

Banks are great for long term lower cost loans. Typically there is more paperwork invilved and longer time to get approved.  Also they are typically going to lend on places in very specific conditions.

HML's are good for short term money needs. Typically the process from request to release funds can be shorter than banks. Also what they are willing to lend on condition wise may be less stringent. With these you are typically looking at higher interest rates and short loan periods. It can be financially painful if you aren't able to exit on a place on time and they foreclose on their loan

Again a lot of this depends on what you are looking to do so let us know and we can help you more.

Geoff

Balane,

I am wondering what you and your boyfriend do or what skill set you guys have?

Also when you want to make 10k per month do you plan to leave your job and have some time to devote to remotely running your real estate investment or do you want to be completely hands off?

This may help dictate what is best suited for you.

I personally would try to parlay your skill into the way they can best relate to real estate.

For example if one of you were a mortgage lender at a bank I would recommend looking into doing private money lending. 

If you guys work in the building trades you may want to look into buying and repair distressed properties.  From there either selling them or renting them out.

It seems like you want to long term develop semi passive income.  How passive that is will depend on what you choose.  Typically the more passive/less time required from you the lower the relative returns are likely to be.

Long term I think that having larger multifamily properties can be pretty passive as long as they are able to support a property manager or they are purchased properly and can support the cost of property management.  The flip side of this is that you still must manage the manager to some extent.

Your other option is to work in private money lending but that is going to take time to find good deals as well as vet the deals.  Also if you choose poorly and the borrower fails you have the requirement of foreclosing and taking care of the mess.

Another thing you may want to look into is syndication but unless you control the deal you wont be able set the payout schedule or control money release etc.

If you could give us feed back that would help us tailor the recommendations!

Geoff

What are your goals with this?

Will this be easy to handle at a distance and still profitable? For me I would want to make sure it will be profitable when you leave as well as easy enough to rent. It would be a bummer to hold onto a place and lose money every month.

How much headache do you expect it to cause and is that more or less than you are will to handle? If its going to be a easy and money making place after you refinance out of it I think that is a good case to keep the place.  If it is going to cause headaches and or barely break even before vacancy and turnover etc Id sell it.

Also were you living in it for more than 2 years and planning on moving? If you lived in it to be able to take 250k single of 500k couple worth of profit you may want to go that. After a period of time you will no longer have that advantage.

Personally as long as you expect to make a fair amount of money every month and the turn over will not be to much of a headache to handle. I am a big fan of keeping and financing out your equity.  This is because you can write off all the interest as well as not having to pay taxes on profits (assuming you didn't live in this long enough before leaving).

Let us know what you decide!

James,

I dont know what your talking about.  This is broom clean.  Ill explain why.  The broom is clean it was never used. So clean in fact it is still at the store because they were never going to use one so why waste money buying it in the first place?

Depending on how your feeling and if the person keeps calling and wanting money back let them know you will get back to them once you have officially cleared the apartment.  At which point do your cleaning or replacement or however you decide to best deal with this.  

Add up the entire cost of the bill (don't forget to include the time support staff spent coordinating etc). If When it exceeds the security you contact them and let them know the amount that it exceeded their security by.  Then follow up with wanting to set up a time for them to pay etc.  

I found this kind of flips the script and adjusts their expectations.  With that being said I don't expect they will actually pay any owed but it may help remove their demands to get the security back.

Let us know what you decide to do and how it works out.

Geoff

Anthony,

Banks don't like to do HELOC on a non owner occupied property. Albeit there maybe a few that are willing to I am on board with @Joe Villeneuve why not do a mortgage?  

A HELOC limit can be changed, interest rate increased or stopped (you can no longer borrow more even though you are below your limit). Whereas finding a mortgage lender is much easier and you can get the interest rate locked as well as all the funds up front?