All Forum Posts by: Matt Concannon

Brad....lol...only 12 months later.  Yes...bought the building.  Actually been so busy running the building, that I have not been on.  To the original questions.  I had two investors at 12.5% each (a husband and wife) who did not need sign the note.   Another investor at 25%...did sign the note.  I own 50% with my wife.  Project is going well....projecting almost 10% cash on cash return for first 12 months.  That should skyrocket to 30% cash on cash return for year 2.  With potential for more.  

I purchased a 40,000sq ft sports facility that does not have a/c.  The building was built in 1996.  Quality heavy steel frame construction. 20’ at the low side and 25’ at the peak.  It has typical fiberglass insulation.  Any advice on adding a/c?  Any rough idea on costs?  I do have access to a local wholesaler for the equipment.  I have access to a low cost commercial electrician(friend).   But not sure my regular handyman who installs my hvac on my residential units can handle something this big.  Any thoughts and advice would be appreciated . 

 Thanks for the thoughtful response Brad.  The bank indicated that I can do the loan on my own (net worth, experience, ext.).  It will just be easier on the cash out of pocket to bring on a few investors.  And they bring a lot of business experience that I would value, as there is an active component to the property that will need to be managed.   The investors are older and don't want to go through the vetting process if possible.  Not a syndication, but I am telling the bank that the investors will not be actively involved with decisions.  

$2.5M 45,000 sq ft.  25% down.  I am the primary investor.  

Question:

If I take on two investors at 12.5%...can I avoid them having to sign the note and getting vetted?  They are more than qualified, just don't want to go through the vetting process.  

Details:

Financing will be 75% ltv, 5-10 years fixed, 25 year AM.  Not sure of the rate in the current environment.  Negotiations are in final stages of contract edits between the attorneys.  

Open to any useful advice.    

The banks and credit unions I talked to have not wanted to do the 2-4 multis.  The credit unions have fantastic 15 year products with great rates and really low fees.  But that is not meeting my current goals.  

Chris...your answer is awesome. I was a high volume RE agent for years and never understood it the way you described. Stephanie P....I haven't seen where the LLC type loans were as competitive as conventional financing if we can meet the income requirements, etc? Seemed that both costs and rates were higher from the quotes i have received.

Pennsylvania

Sounds good.  I assumed as much.  So next question...are there any conventional products right now on 2 unit investment properties, that are more than 70%ltv on a cash out refi?  

I have a VA loan on a 2 unit that we don't live in (we used to live in it 22 years ago). Are there any refi options that would utilize the VA loan? (everyone I have talking 70ltv on a 30 year fixed conventional product with rates about 4.25 paying points. Wondering if I there would be advantages to going VA and increasing LTV).

as a follow up to this...I did a cash out refi with a local credit union to 75%.  They did an equity loan @3.85% that had zero points and zero fees.  They even covered the first $500 of the appraisal.  There is no escrow and not even title work.  It was a great solution.  Our cash flow increased a decent amount from a lower rate and the term a bit from where were on the amortization.  We purchased another property that with the cash at 25% down (ended up with more like 40% equity with the new value).  This was a great purchase and is cash flowing as much as the first property.  They aren't all this good, but this was a great move for us.  With interest rates low and inflation rising, now is a perfect time to put your equity to work.  I'll be repeating this process with more of our properties.