All Forum Posts by: Matt H.

Seems like 95% of you are against this. I think you're all nuts. A years rent paid up front is a dream. I have 3 current residential tenants and 1 commercial who do this. Plus I have had more previously Never had an issue. And even if I did not any larger risk than anyone else you put in. Anyone can go bad at anytime, you're guaranteeing that happens after a year. They can have good or bad reasons and be good or bad tenants. But the fact is it's better for you all else being equal. Period.

Time value of money. Savvy tenants may even want a discount for this and I'll give it to them if it's fair. Still worth it. Money now is better than the same money later. Every time.

Lastly I definitely don't set aside the pre paid rent, I invest it and make more money with their money.

Just my .02

Happy New Year,

Matt

So you'll start off with a loan of $75,000. 2 point fee up front so $1500 cost. Your rate will then be 6.5%, but adjusting monthly if applicable. Prime is generally lock step with fed fund and that's 2-3 more hikes of .25 so the rate will be 7 or 7.25% most likely at the end of the year. Then you'll be on a draw on the additional $40,000 and they pay it directly to contractors I'm guessing as needed and the interest starts accruing on that when disbursed. I'm guessing the 2 points also applies so another $800. You didn't state the amortization which will help you determine your payments. Then the whole things balloons ( is due in 12 months). I don't like that part. Everything else sounds fair.

Matt

@Jay Hinrichs Haha. yes when used as a verb they are interchangeable. And agreed on your travel strategy.

Jay,

I feel strongly that you answer everyone's questions all the time, someone should answer yours. So while I'm not the pro at this, I'll give it a whirl.

VRBO arguably has a better web experience and has generally more of the higher end listings. More designed toward families taking nicer vacations

AirBnB arguably has the better mobile experience and has generally more of the more economical listings. I believe AirBnB has more total listings at this time. More designed toward people on the go needing a spot to crash.

That said I think people can do fine on either.

For just you hotels make sense. Try to make it a vacation or add in family these sites do pretty good work. We've used both over the years with a very high satisfaction rate.

I also when I was hustling for a dollar just over 10 years ago ran two VRBO summer weekly rentals in Newport. Worked great for that.

Hope this helps,

Matt

I didn’t hear no equity i just not enough equity to cash out. So why not sell? Save the credit and walk with a little cash?

@Yonah Weiss I agree completely it's not that hard to scale the report. And I'm not here to tell you this was a difficult one. But our building is pretty high dollar value and I have to have a reputable firm do it for this particular situation. So that's just cost of doing business for me this time around.

Matt

While you, and might I humbly add, I, may feel we are better bets than owner occupied, the stats say otherwise. So that's the reason for that.

And in July the 10 year (and all rates) were significantly lower, which I'm sure you understand, so can't go apples to apple on quotes now vs July.

On investment property in general they are never thrilled about cash out to 80-85 LTV. And last 12-24 months they (banks) are starting to see the cycle getting a little long in the tooth and are tightening.

And the more properties you acquire the lower they will want your LTV, but also lower the rate you will get quoted.

Matt

Our bigger one, 95 units, was $7500 and the smaller one, 14 units, was $4500. Purchased 10/3/17 and 10/12/17. That's just the cost segs. CPAs and tax attorneys extra.