All Forum Posts by: Jason Leavitt

Welcome! I’m also in Kaneohe. Sounds like you’ve got a great start to your plan. You’re in the right place to keep learning. 

-Jason

I wouldn’t bother with an appraisal, just apply for the refi (you should be able to beat 4.6%, even on a cash out rental) and the lender will order the appraisal once you pass credit and income requirements. The risk is if you don’t use one of their approved appraisers you end up paying for it twice. Just be sure your still comfortable with the new cash flow amounts when your mortgage payment changes. Best of luck. 

Hi Cassandra, prices are high but so are rents so if you’re willing to rent rooms then it can probably cover a good chunk of the mortgage. If you’re talking about a multi family where you’d live in one of the units that might be a little more difficult to find a good one. If you need a suggestion for a local realtor I could give a couple names, just let me know. 

3%???

70 units x estimated average $2,000/mo x 3% = $4,200/mo

You’re a tax guy so I’ll let you figure out how much you pay Uncle Sam. Do you have business expenses to pay out of that as well or does the company pay those separately? 

In Cambridge I pay 6% for a condo but I know the company I use charges 8% for single families. I only have one unit in that market though so no volume discount. 

Why is the previous guy leaving?

My guess is it will be great experience for low pay. But it may be a great opportunity to learn the business for a short time and then move on once you’ve got the experience and can earn a higher fee.

Best of luck!

The lending requirements you described tell me the bank doesn’t want those loans in their portfolio. It’s sort of the equivalent of saying we don’t really want to be in that business but for the right price...  You should shop around. 

How many quotes did you get for the electrical and structural work? Both those numbers sound high but it’s really impossible to know without knowing more about the age and style of the house etc.

Don’t put laminate flooring in a kitchen (or any other damp area). I didn’t personally do this but I bought a house right after the previous owner put in new laminate flooring and it only took a few months for the flooring to separate at the seams near the kitchen sink and patio doors. It just won’t hold up. Tile or LVP would’ve been a much better option. 

Depends on seller’s tax situation but an installment sale might lessen their tax burden so for the right price...

Or maybe a master lease with some sort of option to buy upon owner’s/trustee’s death?

You should discuss with both an attorney and an accountant if they’re willing to explore creative options. 

Not my area of expertise so hopefully others can answer too but have you looked at the auction rules? Probably need some cash ready just to bid. I doubt any bank will lend on this with zero skin in the game and even if they did, would it cash flow at near 100% LTV? Low risk commercial deals like that probably don't have a large margin to begin with.

Thanks for sharing so we’re all aware of this potential pitfall. But something doesn’t sound right. Why would any mortgage company assume anything other than a commercial lease on a building with commercial space (I assume this is what you mean by mixed use)? And how would they know what type of lease you’re negotiating a year after closing? Is there more to this story?