All Forum Posts by: Matthew Jonas

To @Chris F.'s situation, which I find myself in as well.... I understand all expenses will be added to the cost basis with a service start date in 2018, but do you still file a Schedule E for the building in 2017 to record when the expenses happened and write in "0 Fair Rental Days" to denote it was not in service for all of 2017?

@Brandon Ingegneri, you're spot on with your assessment. I realize I need to develop a relationship with some of these smaller banks and credit unions.

@Cody L. - I like this idea! I probably will not leverage it immediately, as I'm targeting NO capital down and am looking at places that need rehab, but it's good once I plan on putting some of my own capital into the deals. For the time being, I am bringing in a capital partner who's willing to issue me a non-secured loan (not on the title) to cover the down payment + rehab with a balloon at year 3. Exit strategy being that I get rents elevated and refinance 2-3 years down the line.

Thank you everyone once again! BP always coming through.

@Kyle Brodwater - appreciate the input. I'll try giving them a call to see what they say.

@Anthony Thompson and @Matthew Rogers,

Thank you both for the input. From my research so far, I had a feeling these would be the answers I'd receive, but never hurts to ask!

I am aware that I can borrow from others to fund the down payment, then refinance upon increasing rents to pull capital back out, but got a little excited when it occurred to me that maybe I can just have seller's carry their own down payments and prove that a building can be cash flow positivie (w/ conservative OPEX assumptions) even with two mortgages. I understand that it's perceived as risky, so I can't be mad at the banks / credit unions.

Thanks again. Regards, Matt

Bigger Pockets Community,

Lately, I have been submitting offers to sellers asking them to carry ~25% LTV (i.e. the down payment amount). This allows less investor capital to be put down on a property while getting the seller a higher asking price, but the trouble is that banks and credit unions typically want to see some form of cash (or 'skin in the game') before loaning.

Have any investors found a bank or credit union around Rhode Island who's willing to lend up to 75% LTV even though there's not a formal down payment? Any referrals are highly appreciated!

FYI - I can show how the property will be cash flow positive even with a 1st mortgage (from bank) and a 2nd mortgage (from seller financing), but finding a lender that's OK with this is harder to come by. All help is appreciated.

Regards, Matt

BP Community,

Does anyone have experience doing a master lease option on a multi-family building where extensive rehab was needed (e.g., equivalent to 50% of the purchase price)? I am curious how you protect yourself from the seller deciding to not accept the agreed to purchase price at the end of the MLO when a lot of rehab dollars were put in to the place. 

Thoughts?

@Lance Hulsey, great to hear! Congrats. Will be mailing out my first ever DM pieces by 3/10/17.

Hey @Lance Hulsey, 

How have things progressed since 8 months ago? I'm interested in your strategy and was curious how things have continued to pan out. Have leads picked up further after year one?

Hey Christian,

Welcome to BP! I joined about a month ago, and this is actually my first post. 

I've been intrigued by the Federal Hill area, but have heard about the risks pointed out by the members above. Like you, I decided to wait for some other areas to present some opportunity and I've now just closed on a 3 unit property in East Providence today.

Your background sounds eerily similar to mine (I'm also 24 and an engineer), so feel free to connect. Maybe we can meet up around Providence one of these days.

Best of luck to you and your endeavors!

Regards, Matt