All Forum Posts by: Matthew Boyer

"I feel like I'm taking crazy pills!"

I'm working on expanding from our SFH rental to MFH properties. Turns out I'm having starting obstacles I didn't even consider. Owners don't seem to actually want to sell.

Found a 19-unit in a good market that I knew (my old college town). Had been on the market 13 months, so I'm expecting some issues but worth taking a look. Found a local broker and planned a viewing. Next morning my agent lets me know in response to our request to see the property the owner decided to take it off the market, fix a few deferred maintenance issues, and may later relist at an "improved price" according to the listing agent. Well that's weird, right? Didn't want us to even see it at all?

Okay, I'll keep looking. Found a 6-unit in a different, but nearby town. Listed for 2 months. Previous broker referred me to an agent who was awesome. Fast on research, sent me lots of details, even called the town mayor to find out anything else about the property. We plan for a viewing, she calls the listing agent, and guess what. In response to our request the owner decided to take the property off the market to address some deferred maintenance and may relist later. Different owner, different property, same strange results.

Well I'll look elsewhere then. Oh, look at this. Brand new listing comes on back in the first town and same street but a few buildings down from the 19-unit. It's a 6-unit with recently replaced roof, windows, deck, etc. Sounds great. The price is even better scaled from the 19-unit. I let the broker know and he calls to arrange a viewing... Well guess what. First the response was that they can't do viewings until next week. Okay, which day? Actually, what they meant to say was they decided to de-list the property as they've don't want to sell.

I'm dumbfounded. First time it happened it seemed bizarre but maybe a fluke. Now it's happened 3 times in a row over the past few weeks. 

So my question is, is this some strange maneuvering game in MFH markets? Am I approaching these wrong? Should I be directly calling the listing agent to get a viewing instead of trying to go through a buyer's agent? Does this "oh you want to see it? well you can't!" situation happen more than I thought possible with MFH or did I hit the unlucky-lotto?

Figured I should ask in case there's a "that'll happen unless you do XYZ."

I'll second @Andrew Postell on the LLC title waiting period being lender specific. We did a title change back to our personal names from our LLC to refi our rental and got it done a few weeks later. No issues at all.

Thanks, @Bob Okenwa. 

So maybe they just had a couple of checks in there to cover the amount required rather than any supporting evidence of being able to fund the balance beyond their cashiers check.

It'd have been easier to follow if the auctioneer didn't mumble at a low volume!

BP has put the fire under my feet to start learning more and seeing some of this in action. I decided to go to the local courthouse this morning to watch a live auction. It was fun to watch.

Much calmer and informal than I would have expected. Just 2 bids total as the first bidder let the second bidder take it for $1K over his bid (which was only about $800 over the opening amount).

After each bidder put in a bid the auctioneer asked for proof of funds. Each flashed an open envelope to her. I could see one had a check along with another piece of paper.

What's the additional proof of funds? Would you only need to show the down payment cashier's check at this point or are folks also bringing something (bank statement?) to prove they can pay the rest?

Thanks in advance.

Thank you @Travis Lemley and @Kerry Boyle.

@Stephanie P.

Great to know. Thanks Stephanie! Will do.

@Stephanie P.

Thanks Stephanie. This wouldn't be our first rental in the area as we've been in that market for years and we've done our due diligence. In the area it's more often the smaller SFHs that have the harder time hitting profitability, but that's getting off topic of my original question.

You noted the cap was "around 1M" so it's not a standard fixed stop for all lenders at 1M? Our lender has said we could even do the cash out refi up to the same 1M limit after the renovations. But there was no discussion of profitability influencing the decision, so I didn't think that was a factor here.

I suppose we might have to dig around more for lenders if the 1M+ loans are out there, but that's what I'm trying to figure out.

We're looking to purchase a second short-term rental property (beach vacation area), but this time around we're considering going bigger and intending to add significantly to the property. The purchase price is around $1.2M with 25% down (as an investment property) and we'd be putting in around $300K in reno/remodeling. Realtor evaluation puts the ARV around $1.8M.

So the plan is to use loans to cover the remodeling costs then doing a cash-out refinance after the work is done (6-12 months later since we couldn't start work until after summer rental season), *but* our current lender (loan originator) says the max loan for either purchase or refi of an investment property would be $1M. That would limit our cashout at refi to under $200K. 

The lender's investor is Chase, who he says is enforcing that $1M limit and as a big player their limit is likely a standard. So my question is if that's true and we're going to be against a hard limit if we want to refi and get cashout with any attempts at getting the loan above $1M.

Does anyone have experience/knowledge of loans/refi's over the $1M mark? Or is this really a standard limitation? Seems hard to believe there aren't loans out there greater than $1M when we see monster homes in the area over $3M-$4M, but I want to know our limits before going down any roads.

Thanks.