All Forum Posts by: J. Martin

I review hundreds of CRE loans as part of my 9-5 job as a bank regulator, and the non-recourse route would definitely allow you to do a lot of deals with a single, strong guarantor.. The other route with signing as a guarantor depends a little bit more on the strength of the individual deals, but can still be done with many deals..

I recommend calling community banks in your area, and just asking them.. what are the options? Be friendly, and get the right person, and you'd be surprised what info they will give (they want to do business too - banks are really itching for loan volume right now.) You might end up going in circles.. Maybe search for commercial lenders on BP too, and target the specifically. But calling around to the actual banks in your area are your best bet..

Thanks for hopping in @Robert Brubaker . I saw you on one of my other posts too.. I think that's a good point.. but now you're making me wonder if I pay my handyman enough! I still think it's nice to give him a little extra for the holidays though.. I don't have most of the other service people you mentioned, but garbage man for sure..

I'm curious about some others on the site, maybe @Al Williamson ? Tips/gifts? To who? Heart-felt note or something else?

You either have to reduce the numerator, or increase the denominator. Depending on whether or not the debt is all mortgage debt, or other debt..

Transfer whatever debt you can to an entity, then guarantee the debt yourself if necessary. Personal credit card debt? Transfer it to another entity. Private notes? Try to re-write to company with you as guarantor.. Mortgage debt? You can try..

Or you can pay down debt. I assume you don't have the ability to increase income..

I might disagree slightly, and say this depends. And here's why:

1) Some people have VERY deep pockets/income/etc. Some of these partners could sign on millions of dollars in loans, without huge ownership distributions, and still provide a lot of support - especially if the CRE deals are strong. Partially because...

2) If the strong partner guarantees the deal rather than signs directly, it is a contingent liability rather than direct liability. It is often-times not directly underwritten as debt as long as the deal is paying for itself.. Especially if the guarantor is very strong, has CF, liquidity, NW, etc..

3) With strong enough guarantor(s), you may be able to get a non-recourse loan for another 25-50bp. This avoids the debt going on anyone's credit. Ironically, you need a very strong partner for the Bank to have enough confidence to not make any natural person sign.. But experience will probably be important to them too.. With this strategy, you can finance as much as you can put downpayments on, although they might want 25-30% down for non-recourse.

@Robert Brubaker , couldn't agree with you more!!

"Festivive at Holidays', Pleasant appearance, picked-up, well lit at night! ...but don't miss these simple opportunities to promote your place as a "cut above" tthe competition"

I always try to be the nicest place on the block too! And there are always people asking if there is anything for rent. There is a place next door for rent all the time, and people always stop there, decide no, then come next door and ask me if there is anything available, even though I don't have a sign out.. That tells me something..

When's the IPO!?! Just kidding.

Great site, and looking forward to gaining more investors in the Bay Area..

As far as using the data for the future:

My handyman reports expenses, noting the unit, in a spreadsheet. If any one unit gets excessive, I start to look into what is going on.

I take a look at the master utility expenses now and then to see if anything spikes.. can be a good clue of an unseen water leak, or tenants tapping master power to grow weed (haven't had that problem yet!), etc. etc..

Also, I think it's nice to know what your average expenses are (however you want to look at them - per sqft, per unit, % of revenue, etc) in your area for your property type, so you have a good idea when you are purchasing more, for long-term estimates..

If you have to ask the question.. that's probably when it's time to go..

Interview some new realtors, tell them exactly what you need/want, and tell them you don't want to waste either of your time if they can't achieve that. Good realtors will appreciate that you mean business, are straight-forward, and know what you want.

If you're looking to do the wood-like individual panels (rather than rolled laminate), I paid about $1.50/ft for installation, but that included prepping underneath and thick pad/underlayment/whatever - AND in the Bay Area, CA. I would think you could get it at $1/ft there, but I wouldn't mind paying a few cents more per foot for someone good.

As J Scott points out, the rolled laminate is much less to purchase, and much easier to install (so very cheap overall). some of the newer ones look good too, but can't attest to their durability.. I assume good if an experienced investor is using them...

@Waylon Themer , that sounds about right based on most of what I've seen. Maybe they don't tweak expenses because they figure the rest of those stresses adequately gives you an idea of the range of risks they face..

Sounds like your terms are even tighter than out here in CA though.. Multifamily can often get 30yr am with 1.15-1.20X DSCR. Little less cash flow out here and competitive market, so that might be one reason why...

Seems like lots of Houston/texas investors on here (many from CA), so you might be able to drum up quite a bit of business if you connect with them.. (if you are not already).. You can start with Johnson, above. lol