All Forum Posts by: Jeremy Bailey

I'm very new to the idea of commercial size properties. I will gladly take any advice that you have to offer.

Originally posted by @Ken Naim:

@Jeremy Bailey Sounds like you are ready to scale up. As others have said a cash out refinance will provide you with a down payment for let's say an 8-10 unit building while still cashflowing. A straight sale might allow you to purchase 12-16 units. More of unknown but it'll depend on your goals. Do you want to own more investment real estate? Do you pefer small multifamily or want to scale to large multifamily/commercial? Do want to remain an active real estate investor or possibly go passive with syndications?

Right now you are making money and your propery can be paid off in less than 5 years and I'm sure you worked hard to get to this point and you probably got a good/great ROI but your ROE, return on equity, is not that high at the moment. I recommend that you make your money(equity) work harder.

I had eight paid off single family houses with decent cash flow and was happy until i realized my ROE was 4%. I sold all of them and bought a commercial property.

Originally posted by @Amy Verges:

Yep! It was Prime + 1 when I did one last year, but it looks like they may have gone up to Prime + 1.5 for non-owner occupieds now. Still not bad considering how low the rates are right now.

Originally posted by @Jeremy Bailey:

I'll definitely call them! HELOC on an investment? That's pretty cool. What did they give you for a rate? Prime + ?

Originally posted by @Amy Verges:

@Tina Tsysh hit the nail on the head. Sounds like a cash out refi would be a great option in this scenario. I would recommend checking out PenFed. I was able to utilize a HELOC on investment property to do a cash out refinance (they used the line of credit to pay off the existing mortgage, then I had access to the remaining balance).

I've owned property for 10 years. Initial investment(purchase + rehab) in 2010 was $130k-$140k. 

Originally posted by @Alexandre Marques dos Santos:

@Jeremy Bailey

How much equity do you have? 113 k? If thats the case, 15 k over 113 k is a pretty good return. Knowing your place ( low or no surprises) is worthy a lot. I would keep it.

If you own it all and its worthy 350 k, then return is not great. A cash out cost (someone gave this idea) would “tie” the return, so would not give a nice return. Just work and risk. Not worthy. So in this case, having where to park the money with a decent return, i would sell it and look for a better opportunity... if you dont have where to park, you are making 4,3% py... better this than 1%... accumulate some cash and get ready to buy your dream retirement...

Originally posted by @Amy Verges:

@Tina Tsysh hit the nail on the head. Sounds like a cash out refi would be a great option in this scenario. I would recommend checking out PenFed. I was able to utilize a HELOC on investment property to do a cash out refinance (they used the line of credit to pay off the existing mortgage, then I had access to the remaining balance).

Originally posted by @Chris M.:

@Jeremy Bailey reach out to Homebridge Financial Services. Closing on a 3 unit investment property in CT well under 4%

I'm in Rhode Island. When I called two of my lenders a few months ago, their investment rates were in the 4s when the owner occ rates rates were well below 3%.

if I can get a rate in the 3s, I would definitely be open to a cash out refinance. I would probably put that money on my primary residence HELOC while I await my next opportunity. 

Originally posted by @Bill B.:

You still didn’t make it clear. Is your cashflow quite a bit lower than $15k and your net income is $15k? Or are you cashflowing $15k and your net income is over $20k? If your cashflow is $15k and your net is over $20k do the cash out refi, put $200k in your pocket and keep a little cashflow. If you’re only netting $15k and your cashflow is under $10k I’d pry lean towards selling instead  

Are you in vegas? If so and can get in to a credit union like CCCU, 3% should be possible. If you don’t qualify, try a local bank (again, if you’re in Nevada, someone like NSB) and 3.5% should be no problem. Coming down from 5% to even 3.5% is $1500/year less interest on $100k. 

Where can I find an investment mortgage on a 3 family for 3%? I'll refinance and cash out that tomorrow.

Originally posted by @Bill B.:

Are you netting $15k or cash flowing $15k? If it’s cash flowing $15k it’s doing about as well as a $300k house with a $110k mortgage but might be 3 times the work? But “netting” should mean net income and it should include a few thousand a year in principle pay down. If you’re only netting $15k including that and your cash flow is less than $15k, I’d want to find out why. Do you have a property manager? Can rents be increased? Something’s  wrong. 

Ps. If you’re cash flowing $15k, call it $1250/mo. You could refi and take out $200k in “cash” for less than $850/mo for 30 years at 3%. So you’d still have a little cashflow and you’d have $200k in the bank, even more if your current loan is over 3%.