All Forum Posts by: Wilson Lee

I have a small rental property valued at $64k. I purchased and renovated it in cash  in the name of my LLC.  It is currently collateral for a $36,000  Home equity line of credit. Which was used as short term financing to cash out my investment capital.

That home equity line of credit is approaching its renewal date. My lender has provided me two options.

First I can refinance it in the name of the LLC as a 5 year commercial loan amortized over 25 years. It comes with a personal guarantee to pierce our LLC

The second option they put forward is a 30 year fixed personal loan. The deed of the house would go into a trust with us as the beneficiaries and then immediately after closing we would transfer the beneficiary interest of the trust to the LLC.

My question is, would having that mortgage show up on our personal credit reports be problematic for future ventures? We have several rental properties but I’ve yet to purchase ourselves a home and we don’t want to restrict our credit in the future. How does that work?

@Alex Sanciangco

Well this is generally good advice it’s not of much help. The properties I have are fully leveraged.

As far as a 1031 exchange, it would let me access the equity and buying a property to flip could be a way to begin growing more investment capital. Flipping is really not my area of expertise.

I’ve been buying rentals for 4 years. I’ve averaged it purchased every 9 months.

I have just enough working capital to leverage my way through a project and then cash out refi.

I want to move on to doing larger multi family or more than one property at one time. But I haven’t come across a financial product or strategy to assist.

We primarily purchase 2-4 unit buildings and rent them. But the growing is slow.

Have any of you made the jump from doing one deal at a time to multiple deals. What changed? What did you do that enabled you?

They may seller finance 20% in a 2nd position.  They need cash and kinda soon.  I feel rents can be pushed up $80 + on the TOHs.  I have not yet explored demand for selling POHs to Tenants,  Other than fake adds, I am not sure how.  But strong demand is something I am looking for.

How low would you low ball if it was you?   I have time and the sellers are spinning out.  this park was on my radar 6 months ago and they have been dropping the price over the month. 

It looks like agriculture at 14% of total jobs and food packaging at 8% is the main "production" jobs.  the rest is service at 11% and medical.10%

the area is declining on ever metric.

 Yes,  they are selling do to retirement and medical issue/medical cost.  They say the intended to fill the vacant lots with POHs but sudden medical expense prevented them   They may owner finance a 2nd position of up to 20%  If I settle on close to the 750K they want. 

So,  I want to know that I can sell the POHs and that there is more demand out there for the vacant lots too.  How can I find out if I can sell them as the owner wants to keep the sale of the park under-wraps with the park occupants.

it is also nice to know the local building and zoning codes outlaw mobile homes on solo lots of land.  Only parks are allowed.

 yea

the question posed is such risk adequately reflected in the cap.     given the above information about the area and the above information about the income/expenses.

What do you mean by Path to city water?

All 71 pads are on city water now 

1 was in the OP,  71 lots,  51 occupied.  the remaining 20 never had homes.

2.  Seller finance/ sale to tenants cash.    Value of each is ~ 5k whole sale, and ~15k retail.

3.  the other park has 3 vacant lots out of 41.

The lot rent is $120 per month.   Market rent is $200 per a park 8 miles away.  this park has worse roads and lots too. 

the POH rent is $300 + the lot rent.

 Tenant pays all utilities including curb side trash pick up. 

City water and sewer. Roads paved by the city.

No lawn maintenance on TOH or POHs  There is lawn care for the vacant lots.  Preformed by on of the renters for $200 per month.

Taylor,  with that info,  how do you feel?