All Forum Posts by: Bill H.

Hello,

I'm a 50% member(there's 2 members) of an LLC that has several rentals that will soon be free and clear. Once free and clear, we're considering splitting the properties up and ending the LLC. We have an excellent relationship, but have different views on keeping the properties, selling, 1031s, etc. What issues or complications should we be aware of? The properties and LLC are in Maryland. And there's significant gains in the property, they were purchased 10-12 years ago. Thanks!

Hello All,

We currently have an LLC that owns about 24 single family rentals in MD. They're currently financed with a local bank at 4.75%. They're fixed for 5 years and then adjust, we have 3 years left before the next scheduled adjustment. The loan size is about $1,100,000 and the LTV is 25% or less.

Any suggestions on finding a fixed loan product for a rate and term refi?  The local banks in my area have a dramatic rate increase for anything fixed more than 5 years. Thanks for any info.
 

Hello Lou,

I'm going to add to the 30 year crowd.  Especially being self employed, I'd take the longer amortization.  It gives you some cushion if the business has some down periods and/or your property is vacant for some time.  Also, if you're ever looking to acquire new financing for future real estate or business-related endeavors, you may be more attractive with a lower debt to income ratio.

I know the 15 year looks great on paper, but it doesn't take much for it to be a detriment.  

Keep us up to date on the meetup.

I did transfer the ticket to someone else.  It's a great event, I'm sorry I'll miss it.  

Hello All,

I have a ticket to the Best Ever Conference in Denver on 2/22/19 - 2/23/19.  I purchased it a few months ago and am selling it for $300(the amount I paid). I did confirm the ticket is transferable.  Anyone interested?

I agree that this is another "It depends..."  As others mentioned, it has a lot to do with comfort level and their perception of risk.  I think the type of financing plays a huge role.  If I had access to a 30 year fixed product, I'd be willing to go to 80+%.  But if you have commercial or private debt coming due in 5 years, I'd be more comfortable at <70% .

With your specific example, I'd be comfortable with a bit more leverage than 50%.  But I think your reasoning is solid for having 50% and it definitely reduces your market and int rate risk.   

The advice is excellent- use your own contractor for the install and have them sign an addendum stating that they're responsible for any future costs associated with the washer and dryer.  I love that addendum!

When we started buying rentals, we often supplied washer and dryers.  We quickly learned that they created the biggest headaches(and costs) in our rental business.  

Hello Dustin,

Assuming the walls are paint ready, I'd expect to pay about $1000.  

If the vinyl plank flooring is a good quality product, such as Trafficmaster Allure, I think you're getting a good price.  And it's great not replacing carpet every few years.    

I wouldn't recommend this strategy, but I've left the tenant in place. As soon as we're done rehabbing new properties, I'll most likely terminate. We're still getting paid late, but not more than a couple weeks.

After my original September post, I started the eviction process and she caught up on the late rent immediately. I left her in the property because I was working on a few other properties. I didn't have the workers to rehab the property quickly, so I've continued to be more lenient than I should be. But she's continuing to pay slow, so I'm going to have to end things soon.

I appreciate all of the good advice!