All Forum Posts by: Dave Hurt

Hi folks, 

I was just shy of the finish line on a cash out refi on a rental I hold in an LLC...when today my Lender called and said a 'new Fannie Mae guideline' prohibits cash out refinances on properties owned through an LLC...so now according to him the ONLY way I can do the cash out refi is to quit claim to my personal name, let it season for 6 months, THEN do the cash out.

He has been in the industry for quite a while and works with a lot of investors so I want to believe him but REALLY?!?!  How many of us take down properties all cash through our entities and then want to cash out?  Can this really be the case?

@Marcia Maynard is spot on with how we would handle it as well...especially if they were good tenants!  Also if they are good tenants and we want more like them - we'll ask if they can refer anyone else who would be interested in renting the property and in exchange be lenient on pro-rating...that way we have someone else lined up and we aren't left trying to find a tenant for the remainder of the final month that we anticipated having them in the property. 

Welcome @Tiffany Warren from a fellow Charlottean!  Let me know if I can help in any way.  Happy investing!

Hi @Brett Van Leeuwen I'd say it really depends on your goals. You have a lot of equity in the property that you could leverage to purchase more properties if you were set on holding it (but that eliminates the whole idea of owning it free and clear when college time comes). Personally, I would sell it because it isn't performing stellar when you factor in capex, routine maintenance, vacancy, and management, then I would utilize the proceeds to acquire a better performing property, like a small MFR. You could take advantage of a 1031 exchange to mitigate the tax hit as well.

But again, this all depends on your personal goals with REI. Good luck!

Welcome @Darrell Tucker! You've definitely come to the right place to learn everything you could possibly want to know about REI.

My wife is actually in Human Resources at CCBCC - they are a great organization with an excellent company culture!

I host a monthly meetup for Charlotte investors.  Many folks new to the game attend...would love to have you come out!

Thanks @Joel Owens I would greatly appreciate your input!  When I'm back in the office I'll shoot them over.  

Yes there has definitely been an increase in sales over the last several years with the new CEO coming in and shaking things up including the new image, aggressive ad campaigns, etc.  Popeyes was once a very tired brand with many old, disinterested franchisees.  The brand is targeting younger more ambitious operators now and after surveying many different concepts, we decided it was the right fit for us.  

You're right about Bojangles - in fact I originally wanted the Charlotte market for Popeyes but the brand is not allowing franchisees due to the loyal following Bojangles has.  All PLK units in Charlotte are corporate stores.

Chick Fil A definitely does higher unit volumes, etc but it isn't a chain that allows large multi-unit franchisees so it was out of the question for us...plus one of my partners is a multi-unit franchisee (40+ units) of Dunkin Donuts and they are very strict about establishments who serve breakfast.

@Joel Owens your AUV is a little on the low side - FY 2015 was more like 1.6M and new stores with the new branding and facade are trending closer to 2M.  

Correct I am working with a developer who is taking down the land,  building the asset and then I come in with the equipment package etc as a tenant.  Sites we're looking at now are in the neighborhood of 300-500k. 

We are paying a bit of a premium on the lease but it is a sacrifice I'm willing to make instead of shelling out 800k up front like we are doing with our FSR concept each time we open a unit.  

Not to mention it has been so much easier getting bank financing for a well-known QSR brand than a smaller FSR concept that serves alcohol - what a headache that was...

@Joel Owens I actually messaged you a couple months back when I was first approved as a Franchisee to see if you had any sites! Must've gotten lost in translation.  At any rate I'd love to learn more about your sites and/or buy you lunch when I'm next in town.  The QSR is Popeyes Louisiana Kitchen.

I forgot to mention, I will be down in the area the week between Christmas and New Year if anyone is interested in getting together for coffee or lunch!

I think there are two camps of first timers - those that don't take the time to educate themselves properly and jump in only to be eaten alive...and they quit. Then there are those that overeducate themselves and fear holds them back from taking action, so they continue to read books, listen to podcasts, browse the MLS and dream of investing...then eventually, they quit or just never get going.

I think a balance between education, action, and PERSISTENCE is necessary.