All Forum Posts by: Tyler Weaver

@Paul Sandhu I have not. But I do have soap and sinks!

@Bjorn Ahlblad 15% tax rate for real estate professional designation?

So then you are talking about 100% LTC (Loan to Cost) and say 80 LTV? There is a much better margin of safety there. Basically the lower the LTV is, the bigger problem you could face and still be able to sell the property without bringing money to the closing table.

Well, there is now a searchable record of you knowing about this unit being illegal on the internet. So there is that. 

Zoning could potentially take action on you/your property. 

The biggest worry would be what would happen if there was a problem at the unit, like a fire or a death. Which would not only be on your conscious but there could be some pretty steep financial liability. Probably also criminal charges could come if that happens. 

You are right to take caution about 100% LTV. Hopefully you have some liquidity outside of this deal. It is great you have such a solid relationship with the bank. You could look into doing some forced appreciation to these properties so you have some equity in the property and could sell if you wanted to.

The comparison between selling, and leveling up or do nothing seems a bit unfair to the hold position. You also have the option of going to a bank with your new financial statements, getting a cash out refinance. Then you can use the money to invest in other projects. 

One major driver of this decision between cash out refinance and 1031 is property taxes. I am guessing with each reassessment your 420k property will be bumped up a couple percent for taxes each time. However, if you 1031 into a larger building you will be paying property taxes on the whole 1mm or whatever your proceeds allows you to leverage up to. That can have a pretty big impact when you are comparing the investment you are holding + a new investment from cash out refi vs selling and 1031 to new investment.  

Do you mean investing in student housing? Yes there is a ton of turnover, but there is a strong demand. I have not had any problem filling my property in Clifton. 

Bill Patterson https://www.sspfirm.com

@Irina Seals kind of makes sense. One thing to watch for is that you will likely have to wait until after the capex to refinance. If you have a property that needs new HVAC, roof, and kitchen is out of date it will probably suffer on the appraisal process.

The reason I asked was just for consistency. If someone were to look at your numbers and compare to a deal they are considering when they had reserves in their underwriting they will be left wondering why they can never find a deal.

Worse terms usually. They likely wont be fixed rate 30 year. Probably more like 10 year balloon, 3 year adjustable, 25 year amortization. 

You can get 30 year commercial but the rate will suffer.