All Forum Posts by: Kyle Zochert

Hey Guys -

Looking at interest rates these days, I'm looking to refinance 10-14 of my rental properties from current rates of 4.25-5.25% to a lower rate. I own them either individually or jointly with family/friends. They are QNR, 30-year FRM, with LTV's ranging from 30%-75%. I've spoken with several lenders but each one ends up having a restriction (such as a 4-mortgage limit or substantially similar interest rates) which creates a problem for the refinances.

Is anyone else in the same boat, and what did you do?  I mean i can keep the same rates, but I'd rather save the $10-20k annually.

Thank you,

Kyle

@Susan Armstrong Fisher I've used them twice for slab foundations and would use again.

@Ben Bruckman 

Your insurance does seem a little high.  I use Sam Sotello in Austin, or CNC Insurance in Dallas.  

Also, if you live in San Antonio I'd strongly consider managing the property yourself.  

A few questions:  

How old is the house? Based on your numbers and the HOA it seems like it would be low(er) maintenance and build a stronger case for self-management. I have a few properties I self manage and it's 1 repair call every quarter which easily justifies me saving $150+ a month.

What neighborhood?  Is it ripe for long-term appreciation (or faster than the neighborhoods you'd be buying in)?

How much equity do you think you could pull out whether doing a new loan or paying realtors to sell?  Realtor fees will take a pretty big chunk out of a $200k-$300k, and there would be a steep discount if someone is buying the property with tenants in place.

These would be the questions I would consider.  I just re-leveraged my Austin portfolio to buy in SA and I sure do miss my monthly cash flow in Austin :(

Good luck!

Kyle

Hey Colette - 

I'm a little late to the party, but also thought I'd post my thoughts since I own a similar property in the neighborhood.  

First, to the area, its lower-end, working class (C-D Properties).  There's long term potential for appreciation, but it will take a while.  I am pro-78207, but be patient...like 5-10 years patient.

On the underwriting, purchase price seems typical for the area, but everything else seems off.  The initial repair costs is probably low depending on the condition, is it occupied?  Foundation problems are common for the area.  I ended up just shimming the foundation for my big house and it was still $3,000.  If I had sprung for full foundation it would have been $10,000 alone.  Closing costs and points are low on the schedule.  Rents...you might be able to get this, but it depends on the layout.  Insurance was actually high, but it might be a flood plain.

Utilities! Once you get a solid handle on the initial repairs and the rents check out, this would be the main question mark. Is it split or common? A lot of houses in San Antonio are old houses that were split into several "units".I have some houses that are common water, common gas, but never common electricity. On the gas and water, sometimes I do the RUBS, and sometimes I just eat the cost. I would be hard pressed to buy a house with shared electricity. First, there's the expense risk of how much your tenants are going to spend, but the real issue would be financing. Banks (or at least the ones I've used) want to know if they are putting a lien on a SFH or a MFH. What saved me in my case, was that the property had two meters since the 1930's so the City of San Antonio gave me a letter of nonconforming use, saying it was ok that my property was a duplex. I had another friend who attempted the same thing (in a house that looks very similar to yours) and was unable to get a letter, which was fine because he was in the due diligence phase, but it's something to watch out for.

Anyways, hope that helps.  Feel free to shoot me any deals you might be looking at.  MFH is tough in SA right now!

Kyle

@Daniel Tisdale What neighborhood?

I'm just East of Alazan Creek close to the Cattleman Square.

Hey Terri - What’s your gross monthly rent? Maybe you could offer a flat fee for management instead of a % of rent. Also, If you’re trying to evaluate the impact of Property management, then i think you should keep your assumptions the same instead of changing to a 5% vacancy if property managed. If anything its more likely that you’ll encounter an increase in repair costs, not vacancy. I self manage a few of my low maintenance single families, and they are by far the least headache. There’s a call maybe once a quarter. If I had a Property manager, then essentially I’d be paying $500-600 for that one call. My suggestion, keep self managing and only hire a realtor when it needs to be re-leased. Thanks, Kyle

You guys made some great choices! Did you paint the window trim? It looks like it went from the standard aluminum color to a black. Did you paint or replace the windows? It looks really cool.

Wow Jason, thanks for the review and heads up on the Propelio event.

Totally agree with Rick. 

I have a property on the near West side, and would like to buy more, so I keep a close eye on listings in 78207.  Most of the properties listed are both in poor condition and overpriced.  Then, when you do find that gem of a property, be sure to check out the neighbors on the street.  It is very hit and miss.