All Forum Posts by: J. Mitchell Bernier

@Felicia Hamilton Absolutely talk to the prior/current management company. Most times they are going to no more about the property than the owners. The minute I have a signed contract I am contacting them to ask about any deferred maintenance that the owners has not done, how the tenant is, what the rent roll/lease looks like. I then keep them up to date on the process of sale so they know when exactly new ownership is taking place. If I end up using another management company, then I let them know that as well.

@Lynn T. All my insurance policies have multiple properties on them and I use National Security and Fire. They have been a breeze to work with. And all of mine are in South Georgia.

Good luck!

@Lony Dorce Yeah I am sure he will be glad too. @Tommy Cangelosi is with Prime Properties and I have worked with him 5 times for my own deals. Good luck!

@Michele Masters I think what Michael was getting at was, hypothetically, if total rents was 1000 and you finance it with a loan costs of 600 a month, you get 400 cash flow and the tenant is paying the 600 for you. While if you pay all cash, ie 401k, that whole amount is going to you, so are you going to used that extra 600 to build up your accounts again if you don’t finance it? I would personally talk to a CPA before to figure out the best way to liquidate the 401k with paying the least taxes possible.

Felicia, I work for a local community bank and we do those type of loans all the time for investors. We will take equity out of one property to use as a down payment for the purchase of another (I actually do this myself for all of my deals). This allows the investor to keep their cash liquid so that when repairs are needed they are not having to pay for another loan. I have even done deals for investors and myself where we take other types of collateral, such as boats, vehicles, equipment, etc. So I wouldn't be to worried about that. The other great thing is, at anytime you can get a new appraisal and if the property can support the loan on its own the bank will release the hold on 2nd piece of collateral. At least that is what we do. 

As for the 7 year period, from what I am seeing in the market is that rates are close, if not already, at their highs. This is a different economic landscape that the federal reserve is dealing with compared to the 80's. The FED is realizing that if rates go to high then no-one will be financing home purchases and expanding their business. These are two main factors in growing the economy. This economy cannot support rates much higher than this, so it is very likely that rates will either be down or about flat from this point in my opinion. 

@Ben Sherman I live down in South Georgia in the area that Hurricane Michel hit last year, and I have been hearing from customers of it costing around 8-10k for smaller 2000sqft homes.

I would imagine that the price difference wouldn’t be that much different so I would guess 15-20k for your situation.

@Matt Hudson that rule you are talking about is for your larger banks wanting to see you being self employed for at least two years.

However, working for a community bank I have financed many investment properties where we use income from someone self employed for less than a couple of years and also used the rental income from arbnb and the projected rental income from the property they are purchasing.

My advice go find a local community bank and get to know a lender their who you will want to work with. Most community banks can lend off their portfolio and be able to help anyone get financing as long as the deal works.

Good luck!

@Daniel Rivera Unfortunately it all depends. I grew up, still live and invest in rural South Georgia, where most all of the areas have decreasing populations but you have to dig deeper to know what type of demographics are actually decreasing.

The middle income demographic has been consistently steady the whole time it’s the high earners that are moving out for multiple reasons which is causing your A+ properties to suffer. While your blue collar properties have been able to do fairly well.

I will say though, that when looking at your data, make sure that there is a variety of industries in that area. For example, healthcare, education, manufacturing, etc. You can put yourself at risk if it’s heavily centralized in one industry. IE: Detroit

@Kris Bucci Awesome Job this year!

2018 Accomplishments

1. Bought first BRRR(Buy, Refinance, Rent, Repeat) no needed improvements just bought right.

2. Bought my first multi-family, only a duplex but it’s a start.

3. Was able to regain all of my initial cash investment back in 3 months.

4. Own 6 doors.

2019 Goal

1. Have 15 doors by end of 2019.

That’s all I really got for now. Just gonna keep grinding.

I recently was listening to the NPR Podcast "The Indicator" and they had as their guest the professor from Duke University who discovered that an inverted yield curve was a precursor to recessions. He stated that the yield curve has inverted for brief moments, ie days, hours, minutes, and that has not led to a recession. It is only when the yield curve inverts for a whole quarter that it becomes a precursor to a recession. The yield curve is flattening, but don't hit the panic button just yet.