All Forum Posts by: Kenneth LaVoie

I think this is one of the VERY few questions that has only one right answer: Unless you know that you can achieve a 100% return, instantly, via another investment, it's absolutely no question you should put the 6% into the 401K. It's free money. 

Yes, that's the "trouble" .... I can't find anything to beat them! I found a couple of 3.5% 30 years to bundle and pay off the two mortages on the home, but we're looking at 3,500-5K closing costs...brings the "real" interest rate up to about 5%.

I figured as much, and I'm probably giving myself too much credit as a "low credit risk" ... I was thinking someone might want a no questions asked steady return, which are harder to get with banks, CDs, etc. but of course I'm not naive enough to expect an investor to think of us in the same "risk pool" as a CD, haha! 

I should add...at 4%, we'd expect nil closing costs ($500 or less)

We are investors with about 10 years experience. We have a portfolio of 6 buildings, 30 units, down from our original 52. We have very little debt (if you include the loan + heloc on our personal residence, we're about an 8% LTV!

I recently exhausted myself looking for ways to refinance "one last time" to grab the low rates that are out there but no luck finnding anything better than what we already have (more or less).

Our current loans have 7, 11 and 11 years left respectively after which point our income will of course jump 25K per year. We are in our early fifties, semi retired and thought we'd trade a longer term for more cash flow now.

Am I crazy to think that I could find a private lender that would do a cash out refi at 4% for 30-40 years, in exchange for us pledging a ton of collateral? For example, 500K pledged for a 250K loan? 

Here is a list of all our properties, approximate values and mortgage balances, if any.

Address                                                         Mortgage Balance      Value

28 Halifax St Winslow (7 unit rental property) $99,000                    $230,000 (appraisal 2017)

(Commercial 5 year ARM, currently 4.6% w/next reset 2021, matures 2031. Appraised at 230K in 2017, have copy of appraisal)

Personal Residence:                                      $147,000                    $230,000

(95,000 15 year mortgage 3.25%, matures April 2027 / 60,000 HELOC, Bangor Savings, 4.375% / 3 year funding / 10 year payoff, matures 2031)

Following buildings are owned “free and clear” with assessed or estimated value after

169 Silver St. $325,000

17 Boutelle Ave $395,000

60 Pleasant St. $200,000

28 Pleasant St.  $150,000

29 Abbott St. $100,000

TOTAL VALUE OF RE OWNED: $1,725,000 (inc. 230K personal residence)

TOTAL CURRENT/PROPOSED MORTGAGES: $246,000

We are well capitalized, and our credit is also solid, with FICO scores in the high 700s. We have a Personal Financial statement available as well as last two year’s tax returns.

I've actually talked to a weatherization (efficiency Maine partner), as well as an INSTALLER who both told me that they probably wouldn't be a great choice for multi's (even with today's higher efficiency) and I'm inclined to share their cynicism. 1.) monthly maintenance (more or less) with filters. 2.) Warranty: Some smaller operators can't offer the 10-12 year warranties, and my understanding is that they can be troublesome (we're having quite a bit of trouble with our fujitsu installed 4 years ago. In fact our experience so far has led me to regret getting them. We don't use them for heat at ALL becuase my wife just doesn't like the blowing air. We have oil BB and wood stove (WS gives us 100% of heat during day, and boiler only comes on at night or when gone). 4 cords of wood and 500 gallons oil, give or take, 1,900 SF colonial. I think I'm going to go with monitors over heat pumps, though I will miss the added "luxury" of the AC in the summer. I might be overly pessimistic but I'm still in the "not ready for prime time" camp despite even Mr. Holman's very credible, well laid-out argument (which was actually what temporarily bumped me out of the cynical camp to begin with!)

Living in Winslow, investing in Waterville & Winslow. Completely different here vs. Portland, but it's catching on. We've seen an influx of savvy investors purchasing buildings, raising rents and for the first time since I remember, average rents are ABOVE section 8 maximums, like it is in most places! When we got into business in 2009, 2BR apts were running 550-700. Now starting more in 800+ range. 

@Dave Holman

my God you have me intrigued it's now! I really thought that heat pumps still weren't quite up to the job of being true heat replacements. I have a nice four unit all 1-bedroom that I may just have to do this four. Like I said earlier it's got an old gravity steam or hot water boiler from the 1940s which works beautifully, and even only has one thermostat in one apartment. I could probably keep that in place as a legacy system as you described, and use the heat pumps as primary. People say it's tricky to shut off a boiler like that during the summer, but I've been shutting it off all summer for 10 years with no leaks so far. I just got to get a couple of estimates now for the heat pumps.

Sochima

I happened to bump into this thread just today, but Bangor Savings Bank, despite not being perfect, has some pretty competitive HELOCs. We did one on OUR home but they do offer them on 1-4 unit rental properties, I'm fairly certain.

@Mike Roy - You're too kind to label me an "expert" though I've certainly put my study time in. 

I do agree that heat pumps are not quite a replacement for a central baseboard type heating system. I am wondering if there's an easy way to piggy back them like you suggest (perhaps have the boiler set on 62, and let the heat pumps make up the difference?) I might be missing something there, but just thinking out loud. I have a 4 unit (all 1 BR) that has a 1940's era "gravity hot water" boiler. I actually don't think it's steam but it does use radiators. This thing has been maintained since the 1950's by the same company that handles it now, believe it or not! I am considering using Monitors if I can find a good price. I really don't want to pay 4-5K per unit, that just wouldn't make sense.