All Forum Posts by: Jason L.

Who did you have to call to make that happen? I got quoted way more than that, but I have never done it before.

I'm going through this right now. I'm looking at refinancing 2 properties I own under an LLC, but the banks want me to transfer the deeds to my personal name. This costs about $350/property to do. Not to mention I have to basically eat the LLC fee I paid for the year ($140 in Florida) since it's basically useless at that point. So that refi's will cost me at least $840 just in transfer fees.

In other words, if you're planning to refi at some point, then don't bother with the LLC.

 So it sounds like the numbers are relatively similar to mine. Are you including contingencies like vacancy, maintenance, and PM with all of your numbers (maybe you self manage which I can't do long distance, but specifically the former 2)? When I say my duplex doesn't do great cash flow under the refi, I am including those contingencies. So if I excluded them, then I'd also be about +$500 per month.

 I appreciate it, Kelly. We all make mistakes. I guess it kind of helps my disposition that the mistake I made hasn't cost me any money. I evaluated this property under one set of financing terms, had the numbers work, but now it isn't working as well under another set of terms. I guess that's somewhat of an "apples and oranges" argument. Like I've said, if it just means I leave things as is and don't get to use the refi amount to buy more houses instead, then there were way more troublesome ways I could've learned this lesson about what refis cost. I think that fact alone makes it easy to take things in stride, and I'm glad you noticed!

 No, I definitely have included all contingencies at every step of the way. If I hadn't, then I never would have need to have asked any questions in this post because everything would still be peaches and cream for this unit. Without contingencies included, this property would still be crushing even with the conventional refi.

In any event, the property was initially evaluated under my private financing terms. I'm thankful the property has been terrific under these terms, and I'm not under the gun to refi (even though I'd have prefered to). If it simply just means that I keep it as is for a few years, pocket cash at a faster rate, and then consider just selling it instead, then I guess there were way worse ways to have learned this lesson about the conventional financing route.

I only said they hit the "rules of this forum" as back of the napkin type calcs. I have full pro formas from before buying. For the record, it's not my 1st rental, but I just haven't bought either one using any conventional products. My comment was more along the lines of how could this property turn into such a lemon if I followed the same basic tenets everyone else does (especially since I've been loving this property up until I started fishing on the refi)?

You're 100% right about shopping around though (and of course this is Bigger Pockets so my DMs have been blown up by lenders, lol). $50/month is the difference of another 3-4% annual ROI, so it might become enough in this case to make it more worthwhile if I can get the loan down (especially since my waterfall calculations are at worst way too conservative, so things are possibly better than I project but unlikely to be worse). It's not like the property is far off in my calculations from being worth the refi, but it certainly holds my feet more to the fire at 5.75. I'm not in any rush to refi though so if I have to just keep it as it is, then I'm happy to do so.

Unfortunately I'm not sure what more could be done beyond that. I just put 30k into totally making this house new, so I probably can't do much more to add value right now since all the big ticket items were hit. It's possible the appraised value is higher than what I think it is, but that doesn't really help me now unless I sold it or did a HELOC instead. I already don't live anywhere close enough to self manage, and in fact I'm moving another 2 hours away at 8:30 this morning lol. I think the answer right now is to shop for a better rate like you suggested, but then maybe wait another few months regardless. I'm pulling enough money out right now that even 6 months would make a huge difference on the ROI calculations. I think you're definitely right that I need to be more patient though. Thanks the input.

 Yeah I mean I guess this is true, but I suppose my confusion is how a property that hits every benchmark imaginable as laid out by members of this forum (1.1% rent of all in cost, <50% operating expense, 28% cash on cash return) could turn into such a burden on a simple refi? If others are buying on the same KPIs as I did, then what exactly am I missing here?

I'm aware, but it doesn't exactly help my situation because my problem is already that I have too much of my own money locked in the house (I can get enough on a refi to repay my initial loan but recoup either none or very little of the $30k I put up. I haven't had an appraisal yet though and I'm guessing my ARV could be better than I think). So in other words, all I'd be doing is locking more of my own money that I can't use into in the house, while subsequently decreasing my cash flow to get any of it back. That's burning me on both ends.

As I said in a previous reply, I think the obvious answer is that I should just wait another year or 2. I'm getting great cash on cash right now, and thus I could pull more of my own money out as a faster rate and then look to refi. Either that or look into a HELOC for liquidation.

 For what it's worth, the tenants do pay a fixed utilities charge of $125 charge combined per month, which is included in the rent number I gave you (I checked with the city prior to buying, who told me the previous 12 months bills had never exceeded $135). The last 2 bills came in high, but my PM found a leak that has been fixed, so I'm crossing fingers that the utility rate will return to normal next month. PM and I have discussed raising this fixed amount though if the consumption's being exploited as you mentioned. Point taken on seperate meters in the future, but it's probably not worth the thousands of dollars I'd have to spend just to save $35/month.

Also fwiw I interviewed 7 PMs before I hired. I'm fairly confident based on this sample that I'm not overpaying on PM, and I'm probably paying below market tbh (keep in mind I'm counting leasing/renewal fees in addition to the monthly percentage in the number I quoted you. That's not just the percentage).

Definitely something I'm planning to look into. I don't know if you can get a HELOC on a non-primary residence but I plan to find out.

If you don't mind me asking what kind of numbers did your Tampa duplex get (purchase, rents, and fixed expenses; you can see mine in the previous posts)? Also what part of town is it in? Curious how similar they may be.