All Forum Posts by: Matt Higgins

@Jonathan Greene

@Corey Hawkinson

I had a guy call our company today looking for us to find him a 4 plex in the metro and have us manage it for him. Talk about low inventory and high prices at the moment.

The returns always look better with more leverage. Maybe just pile into high risk corporate debt & junk bonds??

Kidding, we are in the same boat. Im not going to buy a property in 2020, market has been too hot for too long , enough is enough, and there’s no need to take on more leverage......but, I’m working on a great deal if I can get the city to change the zoning, and I sure would like to defer some taxes with another cost seg if possible, and I could probably pull out all of my investment and get ridiculously good financing on the backend. So ya...

The other scenario obviously is that vacancy goes up, rents go down, and your loan is up for renewal. I would say if the numbers make sense on 30 year fixed financing it might be worth the shot.

@Corey Hawkinson

coming up on the end of the year we were just looking at the returns on all of our properties and comparing one to another. Bottom line, there really is no comparison. I bought a condo for 13k back in 2009 or 10, it paid for itself in less than 2 years. What I’m getting at is the returns on the properties I bought back then are SO much better than some of the more recent properties. If you’re starting out now you just have to try and find a good deal, but I wouldn’t necessarily 1031 out of great deal unless I had a great deal waiting for me

I love a reason to drink beer.  I’m going to try and be there.  @Corey Hawkinson I will bring the couple contacts I have with the VA and attic recovery housing.

Other possible problem.  Let’s say you lease a property and take deposit because a unit was coming vacant, but the current tenant refuses to leave and becomes a holdover tenant.  Similar situation to the one asked in this post.  I wonder how that situation plays out?  I’m glad that I haven’t had that one yet.  Can’t lease a property that you don’t have possession of 

A contract is a contract In my opinion and in the eyes of the court.  On the day that lease starts you would be trespassing on their leasehold estate.  

The solution is to ask, offer up your current townhouse, or try to buy them out of the lease.  Usually when a tenant breaks their lease with us I don’t sue them for damages but I do keep their damage deposit.  

Short answer yes, when you sign a lease with a tenant you can not change your mind 

@Eddie Gonnella I’ve never tried. If I’m going to brrr and hold I usually buy in my own name or wife’s name vs an llc because I want to get that great 30 year financing on the back end.

The small commercial bank lenders seem to be able to do whatever they want. I would set meetings with commercial lenders and find someone who likes your plan. If they can get all of you guys to sign personal guarantees, and as long as the property appraises, I don’t see why they wouldn’t want to do it

@Ben Hutto I would buy it with a commercial loan in an llc unless you have a way to structure it in one persons name to do conventional on the backend. I apologize but I don’t have experience burrring in a partnership. Find 3 small local bankers and be honest with them on what you’re trying to do with the property. What I usually do is put down 20% on the purchase and fund the rehab out of pocket and refinance on the backend with a mortgage broker. You could probably get some recommendations on BP or I could give you a contact, but you may want to set it up with your backend finance guy too. The thing to look out for is the 6 month holding period. You may want to write that 30k into the closing docs if your title person will let you and you trust your contractor. It would make it easier to refi all of your money out faster. Sorry to write this in a Rush bedtime. Good luck

@David Kelly I would think you might have your best luck contacting a mortgage broker in the area. Use their work and contacts

I usually pay up for “interest rate insurance” (10 year fixed financing).  You shouldn’t buy a car from the only dealership you stop at and it helps to shop at least 3 lenders, and that’s 3 lenders that actually want your business.  One thing I wish I would have done earlier in my career is look over the actual loans docs closer.  What is your personal guarantee?  What if any properties are cross collateralized in the loan?  What is the prepayment penalty if you sell or find a better loan?  Finding long term financing and negotiation the above all give you flexibility which is nice if things get tight.  

I don’t mind putting money into older properties.  If you keep them up and do the maintenance they will appreciate in value if the location is solid.  The tenants who call us ask how many bedrooms or square feet, never had someone ask me the age of the unit. Best of luck to you!