All Forum Posts by: Jim Spatzenfeld

As far as I know, you are not allowed to occupy a unit in a DSCR financed property. They are strictly business investment loans and are not allowed for primary or secondary personal residences.

Thanks for the response. It’s currently a vacant lot, almost 1/2 acre. Seems to me they want to discourage development through excessive fees. I want to build 8 apartments. Just alone the water department fees to connect water+sewer (which is right in front of the lot) they charge just under $400,000 (almost $50k per unit). Traffic impact fees for 8 units is $136k. So just the fees + building permit alone add up to around $600,000

Does anyone know if I can add an ADU on a lot that is zoned multifamily? I'm trying to save the water and sewer connection fees and traffic impact fees (~$70k just for these two fees alone) that would otherwise apply.

So now it’s only 1.4 million instead of 1.5 million for an old rotten 3BR / 1 bath shack along the freeway? Let me take 5 please, or no, make it a dozen, it’s a heck of a deal!

Take the money out now and let your tenant make the payments. If the market nosedives your $100k equity might evaporate real quick and you would have lost your opportunity to pickup something cheap down the road.

What is your hard money loan exit strategy if in worst case the market nosedives and this property only appraises for $425k in a year from now?

That’s false information. Maybe true in many municipalities in New York, but here in California (and probably Utah as well) the owner can do all work himself without any licensed contractors. 

Some people here do not even know the difference between principle and principal. As for my personal investment strategies, it is my principle to pay down as little principal as needed! Can you see the difference between the two words now?

How about doing exactly your plan with a $100k bonus by changing just the 1st year's plan? Only in year 1 you make a change, all following 9 years you pay down exactly as you said you would. In year 1 you take the $120k cash as the down payment + closing costs for a new additional $400k rental. You lose your first year of $120k principal reduction, which adds compounded over 9 years = $69k interest to the end of your loan. In year 10 you sell the $400k house that you bought in year 1 (let's say it appreciated only by a low 3.5% every year) for $564k. $164k profit, use $69k that you still owe on your paydown, leaves about $100k extra profit, and you pay the capital gains tax + closing costs with all the cash flow that you saved up over the 9 years.

With the current rate of inflation, you might not be able to survive in the year 2032 with “only” 45k in positive cash flow.

2000-2009 was the decade with the most homes ever built in the US