All Forum Posts by: Seth Williams

Private financing is super flexible, so you can really do whatever you want. I would make sure you DO do a few things though.

1) Make sure any bank / institution financing is ok with having a second on here, and what position they will want. Most sellers want first position, but that won't be possible if you are getting bank financing, since they will also want first position. They also might not be ok with any second, so you might have to sign a promissory note and attach if afterward. 

2) My bank, who is ok with 2nd loans on purchase, wants to make sure the terms aren't better than their loan, IE. Faster re-pay, better rates , etc., so you might want to clarify, #1 & #2 first. 

3) Structure a good deal for everyone, I like something with an exit strategy, so maybe a 30 year amortization, or 25 year, interest and principle, and a good rate, maybe 4-5 percentage, keeping in mind #2 and #1. Could do a ballon of like 3-5 years or something like this, and the capability to extend. Ideally, you improve cash flow, lower expenses etc, and just go back to the original bank for a refinance / re-appraisal, pay off the private lender and be done with it. 

Good luck, post later what you end up doing. 

In a three fam, occupied by approx 12 total people, I have two sets each at 2 per wash and 2 per dry, and I pull about 175/275 a mo, sometimes for over due laundry they will just go to the laundromat mat. I find it’s always higher in the summer, too. 

I have a commercial line of credit with my bank, it’s  used for whatever I want, like a heloc. If you have a ton of cash flow and your singles / other investments are thru that business, you should qualify for something. All depends on your bank tho. 

I’ve found that going with traditional commercial financing as much as possible is the best. You can also try and get a commercial line of credit for rehab too. Thus avoiding all the up front / long term cost of hard money. However, might be easier to acquire initially w hard money to speed up closing, and get a discounted price for the quick close.

Good luck! 

Depends how far west, PM me, I’ll connect you.

@Christian Ferreira I use a couple different Guys at Align Credit Union in Mass, they do 80% LTV, and do ARMS, Fixed etc. If you want, PM me, and I can set you up with my guys there. They will certainly take care of you. No issues at all, good rates too. I have all my investments with them, they even do 80% LTV on cash out refi's. Great for the old BRRR strat.

Any insight on the “supplemental financing “ lines? I’m not too familiar with these products but thanks for posting! 

Prob best to talk to the local lender you use, or a lender that would specialize in this type of construction or renovation financing....From there, if the deal seems possible, then try and get it under agreement, but put in some strong contingencies, ie, subject to re-zoning approval, subject to financing, etc. This way, you could tie up the building and continue your due diligence. Obviously, its nicer to do all this stuff before hand, but if you can't, that's the other option. Then you can still re-zone, get plans, and even sell the project to the next investor and probable make a good turn on your investment. Just my thoughts, and if this is your first project, id take on something smaller. This could be a lot to chew off, even for someone who is experienced. Good luck! 

@John Barry, grew up in Lynn, now right down the street in Winthrop. I sent you a PM. 

As far as the unit mix goes, I think different size / scale / layouts of the 2 beds would be best. I think some could be for families, with rooms closer together and more living space, and then some could be more room mate style, with the bedrooms further apart. Look up HighPoint in Quincy Ma, they had some really intriguing layouts, some might spark some interest. Some should be 2/1 beds, some 2/2, and Id even put in a few studios too, if possible, vs just the 2 beds. Lynn will continue to blow up with commuter line expansion too, just a few things to think about. Let me know if there is anything I can do to help out, I'm just around the corner, and wouldn't mind staying close to the project! 

@Joshua Wilson, not sure how this would be handled since it's going to be across multiple different states. I talk with a few of my local lenders, and maybe some property can be in one loan, but maybe some others would be separate? Have you tried talking to the current owner of the portfolio and see how they are financing it? If there is no financing, would they consider holding the note for a while? 

As far as leveraging the cash flow, I think you will find that commercial lenders will be more apt to lend to you with a super high debt service coverage ratio, my bank wants over a 1.2%....If this is mega high, and highly exceeds your banks requirement, they might be ok with adding these out of town / state properties into the sort too. At the end of the day, if there is default, they make you sign something to assign the rents / cash flow to them anyway, so they can still cover the deal, and then sell off what they don't want , etc. Hope this helps, id be interested to see everyone else answers. Finding who it is financed through now is the best bet, IMO. Good Luck!