All Forum Posts by: Matt Foster

I have a lead on a 4-unit complex and even going back 4 years there just isn't much by way of comps to look at.  This particular property is 2 buildings/2 units in each.  Given the lack of sold comp properties in this particular city (and similar nearby cities) would you then shift over to evaluating the property using the cap rate method?  Thanks in advance.  

 Define, "soon"

I want to believe you but I'm not sure what you're basing this off of.  If you're comparing Pontiac's upside to Royal Oak, Ferndale and Berkley I'd love to hear why, how and what time frame we're talking about.  Thanks in advance. 

I'm a licensed agent with an LLC and I buy and sell just fine. BUT........there may be restrictions. For example if your broker lists Fannie/Freddie/HUD homes or other REO's, then there's most likely an agreement in place that restricts your ability as an agent to purchase these properties. You might get by using your LLC but you don't want to risk getting fined or losing your license over it. You'll definitely want to have that conversation with your broker to find out.

 Thanks Kevin.  I'll give Huntington a call and see what they say.  Appreciate the link.  

Every bank I talked to said they flat out don't do HELOC's on investment properties (inside or outside of an LLC). One credit union said they might do a small percentage if I was attributing it to something specific such as a roof on that house.  But emphasized that they would not be comfortable using the equity in house A to invest in house B.  I also talked with B2B Capital Funding thinking they would have a program, but no such luck.  

 3/1.5 in Clinton Twp. Fraser schools.  I like your rent better than mine :) 

 Brad,

Thanks for the reply.  

- Long term goals are of course passive income but I'm also aware that I could do a bit better on the return of this property.  I've flipped the majority of my deals over the past 4 years and held a couple.  I can see the next 10 years looking like a similar mix.  

- I do like this property.  It's rock solid but keeping it forever is probably unrealistic.  

- I looked into HELOC's. It was actually my first choice but so far I haven't had any luck. The property is in an LLC but even the extra step of putting it into my own name hasn't opened any new doors in the HELOC department. I probably haven't pushed hard enough but so far no luck and I've probably talked to 20 different local lenders (community banks, credit unions, etc.).

Thanks again. 

 The property is worth $155,000.  I don't have a fix and flip deal under contract at this point just access to the hard money to fund the deals as they come. 

I have a rental property located in Metro Detroit (Macomb County) in a very nice neighborhood.  Just got a 30-day notice to terminate the lease from my tenant.  I need to decide whether to sell it or find a new tenant.  

Here's the facts:

Monthly rent: $1,400. 

Gross Annual Income from rent: $16,800. 

Net Annual Income from rent:  $11,553.

The property is worth $155,000 and is free and clear.  

The primary focus of my business in 2017 will be fix and flips.  I was literally a day away from putting a good faith deposit of $3,000 with a hard money lender that would give me access to up to $750,000 ($250,000 per property up to 3 properties) at 5.5 points and 1.25% per month (so if I hold a fix and flip for 5 months it would be 11.75% interest).  

On one hand I like the rental because it provides steady rent and tax benefits.  On the other hand, we don't have a lot of cash on hand in the business because it's tied up in this property and it would be nice to cash out and use those funds in future fix and flips.  I could save a healthy amount of money by avoiding some or all of the hard money costs.  

Any opinions on what the best move here is?  

Thanks in advance.  

Not legally, but ethically they should have.  I'm an agent in Commerce and we have this discussion from time to time.  It's my opinion that the conversation needs to be had prior to an accepted offer.