All Forum Posts by: Kesete Thompkins

Thank you ALL for your responses. I didn't see all of the advice earlier in the thread and I want to say thank you again. I plan to reach out to those who have offered assistance. I appreciate all of you and your help. This community is invaluable. 

Respectfully,

Kesete
 

Jay and Ko, thank you both for the insight. We've built a solid portfolio and I want to ensure that I am maximizing its potential so that I can position myself to do more. 

I am going to reach out to several lenders who can steer me in the right direction. I've been sitting in this position for some time and I'm ready to re-engage with the market. 

I'll respond once I've talked to someone who can assist to give you an update. 

Kesete

I have a real estate portfolio with good amount of equity (most of the portfolio is free and clear), however my personal DTI ratio is too high and that's stopping me from tapping into it to settle some debts and buy more properties. Other than lowering my DTI ratio (which is what I'm focusing on now), is there another way to realize that equity or am I stuck with dead equity until I can get that ratio to a better space?

I'm open to any and all thoughts and ideas. Thanks in advance.

Kay

I have a real estate portfolio with good amount of equity (most of the portfolio is free and clear), however my personal DTI ratio is too high and that's stopping me from tapping into it to settle some debts and buy more properties. Other than lowering my DTI ratio (which is what I'm focusing on now), is there another way to realize that equity or am I stuck with dead equity until I can get that ratio to a better space?

I'm open to any and all thoughts and ideas. Thanks in advance.

Kay

Chris, thanks for the insight. I believe that turning over the property is going to be my best course of action moving forward. This will allow me to update the space, get market rent, and restart on a fresh note. 

I'll keep you updated on my next steps. I go back home to check on our portfolio soon, at which time I will be executing whatever next step I decide on. 

Thanks again. 

Kay

Caroline, thanks for the respond and candor. Here are my responses....

1. With a balance that low, I know that hard money on this is not an option and that private money means personal loan (aka family). 

2. Because of the low purchase price, this house wouldn't have qualified for a mortgage. I didn't have the full amount in cash so I put 10% down and paid on the balance. 

3. I have a good credit profile, I just don't have the cash reserves at the moment due to needs elsewhere in my portfolio. 

I understand that selling the contract is an option, but I want that to be my last option. The unit will cash flow and appreciate, I just need to get it through this patch. 

My ultimate goal is to get a commercial loan on my portfolio, most of which I own outright. 

Thank you again for your insight. I'll post an update once I've made progress on next steps. 

Thanks for your response. Great question. I never did a formal closing at the onset of the contract, however I will take title once the contract has been satisfied (I'd completed several contracts like that before. I need creative ways to secure units). This was a concession that was made with the seller since we have a previous relationship and they had a previous relationship with the tenant. When the seller wanted to sell, he couldn't get the price he wanted on the open market, therefore I offered to do a land contract with seller finance. This would allow him to get paid monthly, keep the tenants in the unit, and have him get his price. I ran my numbers and based on the equity, appreciation, and cash flow once fully owned and rented at market, I jumped at the deal. Ultimately I wasn't conservative enough with my analysis, especially when it came to analyzing the quality of the tenant and I didn't properly plan my exit strategy.

I see the error of my ways from the start, and with hindsight I'd do a couple of things different. But now that I'm here, I want to make a solid next move to get complete ownership of the house in order to refresh and re-rent the space. I'll get property management on this unit and move forward. 

Sorry for the rambling response. I wanted to provide as much context as possible. 

Exasperated Landlord/Investor,

Kay

Mike, thanks for the response. I agree with the perspective regarding the loan amount. I'm thinking about private money for that reason. My rationale with paying off the seller now is that once I own the property outright, the eviction process will be easier and I can do a true reset. I can do any upgrades with full ownership and start with a clean slate. 

I inherited the tenants when I purchased the property, which made sense at the time, but it doesn't now and it's costly. 

I want to be strategic with my next move so that I'm not in another precarious position. 

Thanks again for the time. 

Kay

Good evening BP Community. I'm a veteran investor trying to think of an exit strategy for an existing 0% seller financing deal that I'm currently paying down. Here are the particulars:

Price: 50K
Amount Owed: Approximately 35K
Interest: 0%
Current Status: Rented but tenant isn't stable with significantly below market rents. With updates, new management, and a new tenant, rents will increase from a late, stressful $675, to an on-time $1150 monthly.

I got the contract to the house as a part of a two house portfolio. I have a 3 year contract on it, and the term is up in July 2024. I want to close by year's end so that I can place the house under property management and let them stabilize the situation at market rent. I'm not sure how I should proceed. Do I...

Secure private financing, own the house outright, place it under management and use that with other units to get a cash-out refi, or

Finish out the contract with great terms but deal with an unreliable tenant that's continuing to cost me money monthly and prolong the process of management until the summer.

Thank you for your time and insight. Any thoughts will be helpful.

Kay

Good evening BP Community. I'm a veteran investor trying to think of an exit strategy for an existing 0% seller financing deal that I'm currently paying down. Here are the particulars:

Price: 50K
Amount Owed: Approximately 35K
Interest: 0%
Current Status: Rented but tenant isn't stable with significantly below market rents. With updates, new management, and a new tenant, rents will increase from a late, stressful $675, to an on-time $1150 monthly. 

I got the contract to the house as a part of a two house portfolio. I have a 3 year contract on it, and the term is up in July 2024. I want to close by year's end so that I can place the house under property management and let them stabilize the situation at market rent. I'm not sure how I should proceed. Do I...

Secure private financing, own the house outright, place it under management and use that with other units to get a cash-out refi, or 

Finish out the contract with great terms but deal with an unreliable tenant that's continuing to cost me money monthly and prolong the process of management until the summer.

Thank you for your time and insight. Any thoughts will be helpful. 

Kay