All Forum Posts by: Joshua Davidson

Located in Wheeling, WV. In our lease, it states that if a tenant chooses to terminate the lease early, they forfeit their entire security deposit and owe rent for the remainder of the current month (if not already paid) plus one month’s rent as a penalty. It’s a big deterrent but we’ve already had to enforce it, and we’re glad we had it in place when we did.

If you buy a property under an LLC, it will have to be a commercial loan, forcing you to put down 20%+ if you weren't already planning on it. However, 4 units or less can be purchased with a residential mortgage. If you don't want to put 20% down, then definitely purchase the building using a residential mortgage. Since you are saying "our", I'm assuming you mean yourself and a significant other, in which case I would also recommend leaving the property in only one person's name. The reason is that you can have up to 10 properties in your personal name. If you each put your name on the property, it uses up one "slot" for each of you, whereas if you alternate properties you can have up to 20 combined (10 each).

If you are planning to do 20%, then you can just purchase with the LLC and do a commercial loan, though you will be limited to a 20 year loan term and amortization, whereas you can access 30 years under a residential loan. Overall investment is better over time with a 20 year loan, but immediate cash flow is better with the 30 year.

Happy to discuss what I know if you have any other questions. Shoot me a message, and good luck!

A local bank will give you the most flexibility when it comes to financing options, especially if it’s your first deal. Some bigger lenders will want to see more history. You may still have to do a personal guarantee regardless, but the local bank will likely look more at the deal versus your own personal lendability. 20 years is a more likely maximum as far as term and amortization…25 years is rare nowadays. Expect 8%+ with the current rates, since WSJ Prime is 8.25%. Good luck and let me know if you have any questions

Hi Thomas. Great to see you’re getting into real estate! I’ve built my own extensive underwriting model. I’d be happy to take a look at yours. Feel free to shoot it over to me.

I would recommend using Ring. I use several Ring cameras around my property and they work great for what I need. They won’t scale well if you have 3 or 4 plus buildings with a need for many cameras since Ring doesn’t have “grid viewing” ability (you can only view one at a time), but the quality and ease of install is great. Plus you can store the footage indefinitely and get motion alerts that are customizable. They’re a simple solution, but they work great for us.