All Forum Posts by: James Allen

@Joaquin M Dugan Jr - I live in Arizona but I invest mostly in Knoxville, TN.

@David Shiling

Many lessons so far! Here's a few:

• Always verify a contractors license and insurance. 

• When investing out of state, understand some cities have county and city property taxes. 

• Don't over improve for the area. 

• Always check if your house is in a flood zone (extra insurance costs). If it's in one, you can contest it and change it if you get an elevation survey proving you're above the flood zone. 

• Don't listen to people who aren't investors themselves, you'll get your fair share of discouragement from certain people. 

• Always visit the market you want to invest in and drive the streets before you invest there. 

• Don't compile all your team members (property manager, contractor, agent, etc) into one person. It's good to have multiple team members to get feedback from. Especially when getting started!

Knoxville, TN has recently been a great market for that. That's exactly the reason why I invest there. 

Wow, what an interesting thread! I think a few things can be pointed out here. 

1. To answer your original question, I don't believe that @James Wise is running a scam in anyway shape or form. 

2. It's not unreasonable to ask for financials but understand it is very uncommon for 2-4 unit property owners to provide to the buyer financial statements like a T-12. There is only 1 instance with a 2-4 unit that I've come across a seller that actually had all of that info. With that said, I would expect the lease agreement to be provided to verify the current income but that's about it. As some have already mentioned on here, those documents are really more common in the 5+ multi-family deals. 

3.  @Lenza M. - Asking if Holton Wise is a Scam was a bit much. There are much better ways to approach and word your concerns/due diligence and I think you've learned that lesson from the sounds of it. Unfortunately like others mentioned, you've likely burned a lot of bridges by doing this post. 

4. If he's not willing to provide financials for the deal and that makes you feel uncomfortable, then just simply walk away. There's tons of deals out there to choose from and there's no need to get so attached to a deal.

5. I'm sure James Wise could've responded to your initial email in a nicer way or just simply said that he doesn't have that information. With that said, he also has the right to run his business however he pleases. 
@James Wise

@Inna Pakhalyuk - I've used PenFed Credit Union and they do 80% LTV on a HELOC for an Investment Property. I spent a lot of time searching and that's the best one that I'm aware of. It looks like they're still accepting applications based on their website.

@Jeremy Taylor - Sure. Let me preface by saying you can do either area for the long term and there's nothing wrong with that. It's just a matter of what your goals are. My short term goal is getting into commercial multi-family so I prefer to use the gentrifying areas for the quick short term appreciation while also generating cash flow and later plan to sell them into multifamily. IMO, the types of areas that are better for long term appreciation are areas with the best schools, restaurants, low crime, etc. They typically cash flow less, but normally produce better quality tenants that stay longer and experience more appreciation over the long term.

@Jeremy Taylor - Yes, exactly. Long term hold and short term hold

@Jeremy Taylor - For Long term I would say West Knoxville is your best bet. For the short term I really like the up and coming gentrifying areas in the 37917 zip and South Knoxville area. Areas to avoid depend on your risk profile. Personally I don't touch most parts of 37915, and parts of 37921 like western heights and Beaumont when it comes to buy and hold. 

@Daniel C. What if I want to take less than 25k to avoid collateralizing the loan. Would I be able to sell properties or refinance as I please? 

I've been seeing a lot of people confused over these EIDL Loans including myself so I figured I'd start a discussion to help all of us make better informed decisions. Apologies if this is already been addressed somewhere else on the forums.

I've been offered an EIDL Loan and looking over the fine print, it seems like there's a lot of strings attached. If you've had a chance to look at the contract already, I wanted to get your opinions on how you interpret these terms and how you feel about them. Particularly, I'm wondering about the following.

1. My main concern is If I take on the loan, Do I have to seek permission from the SBA to sell or refinance one of our properties. I'm in the middle of flipping a house right now and I'm wondering if this would affect that or if I decided to sell one of my rental properties. I hate the idea of the government having a say in any of this. 

2. What can we use the money for? Can we use it to pay our mortgage payments, capital expenses? If I already have money in the account to do that, am I okay to use my old reserves as active investing capital or for improvements and then keep the EIDL money as extra reserves and to pay the bills for the mortgages, utilities, etc? 

3. If you've been approved for the EIDL Loan, did you decide to take it given the terms? Why or why not?