All Forum Posts by: Jordan Decuir

Bob Smith makes a valid point and definitely one worth considering, Particularly around short-term financing vehicles like hard money, that generally come with high interest rates. You will be more than likely required to at least make periodic interest payments during the term of your hard money loan, and that can eat into cash reserves so you will want to do what is necessary to refinance into your longer-term financing vehicle quickly.

George Ozoude , loans will be recourse or nob-recourse depending upon various factors. I am not very familiar with the ins and outs of hard money loans so I don’t want to mislead you. I would call and talk to two or three (or more) hard money lenders and they will give you more details on their loan programs, which would include whether the loans would be recourse or non-recourse. As far as commercial loans from banks are concerned, they can be non-recourse or recourse. Holding all else equal, the experience of the key principal(s) on a loan will be the primary determining factor for whether a bank will do a commercial loan for a multifamily property on a recourse versus a non-recourse basis. If you and/or one of your partners who is also a key principal on the loan has significant experience with multifamily properties, then the loan will probably qualify for the non-recourse status.

Todd Hayes

Hi George Ozoude welcome aboard. Real estate is a great investment vehicle, particularly from a total-return perspective so I think you are doing a great thing by looking to get into it. Have you been to any meetups? Jorge De Jesus put together a small, informal meetup this saturday in the Katy area if you are interested. Best of luck to you. Let me know if there is anything I can do to help.

Elena Pech My point with the “de-risk” comment was that my thinking from the perspective of multifamily, which would be financed with commercial loans that could be non-recourse, so in that event, to me, his risk is limited to the capital that he invests and the rest of the capital at risk (probably 60-80% of the purchase) would be that of the lender’s. If we are talking about a recourse loan then you make a good point, there can be the additional risk that there is almost no limit to the assets that the lender could go after in the event of default.

I’m thinking about it from the perspective of less of his own capital at risk on any given deal

I am a fan of using debt even if the cash is readily available, mostly for the general effect of higher returns and also the de-risking that can occur when it isn’t entirely your own cash on the line tied up in one deal. Plus, holding more of your own cash in your account leaves dry powder in the event that another desireable deal comes along

I would assume that mold tends to be a concern as well given the high humidity levels in Florida.

Totally agre with Grant Rothenburger and Ryan Evans here. I think that the terms that you are able to get on the seller finance will probably be a major driver in the decision here. Also, Shequila Hamilton have you considered continuing to rent while also buying a separate property as an investment and building a portfolio while also continuing to rent? I believe that this could be a way to go as well. I am not convinced that one needs to own his/her own home prior to investing in real estate.

Makes perfect sense. As far as the legal mechanisms that you will need to put in place, itis probably a terrific idea for you to call and talk with a real estate lawyer in your locale to get their advice, would be money well spent. Also, I know that some states’ association of realtors promulgated forms for purchase and sale of homes include seller financing sections/language as well as promulgated seller financing addenda that you could potential use. On the subject, to me the terms are EXTREMELY important and could make or break a deal. As an example, if you could get 0% interest, fully amortized, on a 30-year note, then it could very well make your purchase at $75,000 (well above the comps) a very good deal for you.