All Forum Posts by: John West

I’m interested in refinancing a 7 unit property. I owe ~220,000 on the property. It was purchased just about 1 year ago so as you can imagine, very little principle has been paid down. However, since it is a 5+ unit, shouldn’t I be able to evaluate it based on cash flow? If so, the property at a cap rate of 10% would be worth $420,000 very conservatively. Even if I can only take out at 70%, that would still give me about $70k after closing costs to reinvest.

Has anyone in Maine found a lender who will refinance this way?

Can anyone else share an experience refinancing a similar property? Has the bank required a seasoning period before refinancing?

Excellent Henry - thank you! I like your setup. 

@Mark Shaver thanks for your input. I’m not so concerned about the advertising side as I am the rent collection portion. I’m planning to require automatic deposit, but don’t want to physically meet every tenant to do a lot of paperwork. I’d like to automate it online... maybe on this small of a scale, it’s a pipe dream... idk.

@John Hesford I believe she is referring to B Class and C Class (middle class) apartment buildings. "A" class is new construction and what I would consider "luxury" apartments. D class is considered "warzone". Most on here use apartments/multifamily interchangeably. 

Thanks to the BP podcasts and support from this community over the last 3 1/2 years, I have grown my portfolio to about 30 units and we're still growing. I'm excited to be under contract on our first commercial property and looking for some help.

Among other things, this property has 28 storage units. I have managers who collect rent and take care of the day to day operations of my residential units, but I'm interested in hearing how other storage unit owners collect rent. Obviously, there aren't enough units to have an employee there, so I'm looking for a solution. I would love a wix type site already setup to collect rent and advertise on a sign... any suggestions?

Welcome @Annalise Kingston! It’s always good to see a fellow Mainer on here.

I can’t offer much in way of wholesaling advice. I had considered it, but ultimately decided it wasn’t the route I wanted to take. 

I would like to find a local wholesaler in the state though. Every online search seems to yield huge national companies that aren’t really based out of MAINE.

I think one reason you won’t find many is because most areas are too rural. Wholesalers and flippers (the wholesalers biggest buyers) want to sell quick. There just aren’t enough people in most small MAINE towns to support wholesaling. 

I hope I’m wrong though. Maybe it’s a great wholesaling market and there are a bunch of wholesalers operating right under my nose.

Good luck! 

Either way - I bet you could do a lot better than 30k if you call around and let them know you need 6 or 7 units.

Congrats on being under contract. I have one tenant who gets subsidized housing from MAINE housing. I like the program and I’m thinking about my next building being exclusively for subsidized housing.

I often refer to the charts, and I’ve always been floored by how much they deduct from the rent if the units have electric heat.

I just put 2 brand new rannai monitors in two of my units. Plan on $2,500/piece minimum. I got slightly larger units and paid $3k each. Stinks to loose the cash flow, but I’m planning on little to no maintenance on those guys for the next 10 years.

You're definitely on the right track Jason, but as @Bob Langworthy has already pointed out, you can find a way to make that $100k work a lot harder for you. You could sell your house and use the cash to make a down payment on a multi-family that generates more than double that cash flow. Your tenants will pay down the mortgage on that property too. 

As for accelerating the pay down - I wouldn't, but that is my opinion. There are thousands of threads that debate this, but think about how cheap that money is assuming you're borrowing that money for <6%. I have made more than triple that return on all of my investments in the last 2 years.

10 years from now you could have one property paid off - not a bad accomplishment. 

10 years from now you could own 10+ properties that are 50% paid off. 

I know which one I would pick. :-)

@Michael S Malbrough

The BP podcasts hands down has helped me more than anything else. I have listened to hundreds of hours. It helps you learn the real estate lingo which gives you a lot of credit when dealing with banks and other investors.

When it comes to financing, I have learned that first you need to know what you want. Are you planning to refinance after doing repairs? Make sure your bank will refinance without too long a seasoning period etc... once you know what you want, hit the phones. Call, call, and call until you find a lender who will give you what you want.

Best way to get started? That's a loaded question. I would find someone who knows more than you and bounce all of your ideas off them. A great place to start is a local REI meeting or someone from right here on BP.