All Forum Posts by: Kyle Davis

@Ravi P.  Hey Ravi-  I've triple-checked and 4.25% is the rate.  It's with a Credit Union FYI (so they have a slight advantage as they don't have to pay taxes on some things).

I talked to the franchise president and he gave me a couple other banks that have done financing with them and they are all at 5% and ask for at least 30% down.

Hey BP people:

I have a situation.  I'm currently developing a hotel and have the vast majority of my "ducks in a row."  I think I still need to raise at least $200k, but that is a side issue.

My main issue is my current bank I'm using to finance the project and the loan officer I'm dealing with.  Long story short....I asked the loan officer to order the appraisal on February 19th.  It is now May 21st and the appraisal has STILL not been ordered.  This loan officer has been dropping the ball consistently, and I spoke to his boss, and he replied that I can work with a different loan officer now if I want.  But my problem is my contractor is needing a guarantee that we will be starting the project in a month, or he has to accept other projects (which is very reasonable).

If I could find another bank that would match this current bank's interest rate and personal guarantee's for the project, I would dump this bank like a bad habit, but I'm striking out on finding a bank that will match their rate. The bank I'm using is offering 4.25% interest on a 5 year ARM, amortized over 20 years. They will borrow up to 80% of the construction cost. And each partner in the deal has a personal guarantee of 125% of their cash in the project (meaning if I put in $100,000 and the deal goes south, I lose my $100,000 and the bank can come to me for an additional $125,000).

Anybody have any connections with commercial loan officers that have experience in the hotel industry?

Thanks!

Hey BP members!  I'm looking at a deal and need to know if anybody has done something similar to it, and if so, if it was a bust or a financial windfall.

I'm currently looking at purchasing a church building with a nice addition to it.  The church isn't terribly old (1950's) and the addition was built in the 1980's.  There is enough room to build 9 Two-Bed/1 Bath apartments out of it.  It would need to be totally gutted and a new roof put on half the building.  I would also need to figure out if it would be best to try and separate the heating and cooling of the place so that the tenants pay for it (higher cost to build that out) or just do one central heating and cooling system (less cost to build).

My other concern is management of these types of buildings.  I live in the next town over from this property, so I'm not terribly far away so I can self-manage (I already own and manage 22 other rental units).  But how much crap am I getting myself into with this?  There would be two main entrances into the building, and the tenant would have to walk to their apartment from there (so no exterior door to each individual unit).  But I don't know what all to expect.  I'm assuming the cost to demo and rehab the building to where it needs to be is around 350k.  I can probably rent out each room for $500 a month once completed.

Let me know your thoughts!

@Will Barnard whoops...it got cut off.  My friend wants to open a brewery in my home town now and wants to make me a partner.  Gonna look into that in the next couple days and make a decision from there.

@Will Barnard Thanks, Will, for your comments.  I've been leaning towards buying larger apartments in bigger cities.  The only monkey wrench that just recently got thrown into the mix is a very successful brewmaster friend of mine wants to open up a new brewery in my ho

@Craig Fitzsimmons Potentially, yes.  It all depends on the deal.  The majority of the deals I looked at in Fargo (and when I say majority, I mean I probably looked at 10-15) didn't have very fantastic cash-flow potential.  I looked at one that was for sale for $1,400,000 as a 24 plex and at the end of the year, with a 10% down payment, my cash flow would only be $10,000 a year.  I can achieve that in my local market at 1/4 of the sticker price.  That being said, I haven't been incredibly thorough in my search in Fargo.  I gave two phone calls to realtors as well in the Fargo market to hit me up with any deals and both of them didn't send me one.  Pretty frustrating!

@Corey Blane sent you a PM!

@Steve Kontos and @Chinmay J. I have considered going out of state.  I have around 26 rentals in my market at the moment so I feel I'm not a newbie anymore....but to be honest I'm hesitant as I don't know anybody/trust somebody at the moment and maybe I just need to get over it.

Hey BP peeps.  I've been investing in real estate for about 6 years now and kinda in a weird state right now.  I have been investing in single-family homes to triplexes for the last 6 years and 2 years ago purchased a steal of a deal on a 10 plex.  I rehabbed the 10 plex, upped the rent, and now did a cash-out refinance.  The amount of cash I can pull out is around the 120k mark.  BUT I've been looking around my local market, and markets further out, and can't seem to find a slam dunk deal to put the money towards.  I'm located in central MN, and have been trying to get into Fargo ND as it's been booming for the last 8-10 years, but the purchase price for property there is so high in relation to what you can get for rent it is almost disheartening.  I feel like I want to get into bigger apartment complexes (20 units+) that are value-add type properties, but nothing is popping its head out at me.  The only other thought I had was I could if I wanted to pay off my personal mortgage on my house (which is around $750 a month) with it and be "personal debt" free (but not "business debt" free).  I always go back to the theory though that I would rather pay for a nice cash-flowing apartment complex that could pay for my mortgage, so that at the end of the day when the mortgage is paid for I still have an apartment complex as well.  

A few notes to consider as well:  In my area, most of the time you make a limited profit on your real estate investments, if not at least break even (if you try to use as much debt as possible when you acquire the properties).  So my cash-flow at the moment isn't anything spectacular.

Any insight would be appreciated.  Thanks!

Hello there BP fans.  I have a question I'm trying to figure out and can't quite wrap my brain around how to accomplish what I need.  I have been approached by a friend who owns a brewery.  His current partners want to get bought out to invest in other things.  My friend approached me to see if I wanted to buy them out.  I think the buyout amount will be around 120-160k, and then I will have to assume the current debt on the business along with my friend. I have about 60k cash that I could put down, but how does a person get a loan for the remaining balance?  What kind of collateral is used if there is already a mortgage on the building and all brewery equipment?  FYI the brewery is kicking butt, so it's not a suffering business or anything like that.