All Forum Posts by: Matt Nico

1. Fire the manager. Manage it yourself for a period of time and see if things work better that way. You can always get a new PM later. If i were managing a property with constant maintenance i would take a few days and go in there and give the house a check up and tune everything up to get it back in good shape. Then see how it performs.

2. Sell that place and go in a different direction.

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@Sean Grady

If its for sale by owner try a seller financing deal. Find a rockstar totle agent who can draw up a promissory note. Saves the seller 6% and you dont have to go to the bank. Just make sure the seller owns free and clear.

1 Vote

Originally posted by @Mary Aviles:

@Matt Nico. See my information 3 posts up about my 30-year-round fixed rate commercial loans. I never use ARMS.

Mary, I just read it. Sorry I skipped over it. That's pretty good. Could I have their contact info please?

-Matt

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Originally posted by @Nick Atwood:

As an investor, it didn't make any sense why I was letter a buyer's agent collect 2.5% of the purchase price, for the minimal return I was getting. After many sales, I knew the real estate forms well and had the buying/selling process down. I decided it was time to get a real estate license. It took me about a week to get my license, start to finish- education, testing, forms, etc. I did the research and found one of the cheapest, low overhead, transaction fee based brokerages in the state of OR, and then over 3 years later, started my own brokerage! You end up saving thousands on each deal compared to your traditional brokerage commission split (20/30/40/50 etc.). It ends up costing a little over $2k a year to maintain a license at the minimum, but even doing just 1 sale a year more than pays for itself. A 300k property returns a $7.5k commission, or 3-4 years of the cost to maintain your license.

Being my own realtor provided so many more benefits! Being able to view properties anytime, anywhere. Negotiating on my own behalf. Not worrying about lowballing distressed properties, not worrying if I lose the deal if I'm negotiating too much - there are always more! Plus I can structure deals in a unique ways that provide a plethora of great benefits such as tax benefits, and less money needed to close deals!

Someone debate with me, as an investor, why would you not invest the little time and money to get a real estate license and save yourself thousands?

Nick, I think you are overlooking a handful of things as to why NOT to get a license....

1. Time: Some people are busy with life and do not have time to get licensed. They dont invest full time.

2. Knowledge: While you took time to understand the forms and procedures, a lot of people dont want to be bothered with it.

3. Simplicity: It does not cost you any money to have an agent representing you as the buyer, so this task is easily leveraged.

With all of these things being said, I do agree with you that if you are investing as a full time job, you should at least think about getting licensed. I became licensed in June of last year because I wanted to get serious and learn every aspect of real estate. The commission I receive from my own deals is great, but I did it more for control.

-Matt

1 Vote

Originally posted by @Whitney Hutten:

@Matt Nico A conventional loan is underwriting you to repay the debt. A commercial loan underwrites the property (mostly) to carry the debt service. Commercial loans can move much quicker and take far less paperwork than conventional ones. Once you figure that out, you may never go back. And I did see where someone said they were paying 4% higher for commercial... First... is that HML? A HML will be higher due the short-term nature of the loan. Otherwise, I'd shop around. Commercial loans generally will carry higher interest rates, and maybe a prepayment penalty, but you can find good terms if you shop!

Thank you Whitney!!!

re most commercial loans on 5 year terms, or can I get ones on 20-30 year terms like a regular mortgage? I'm not sure how I would feel with having a handful of SFH's on 5 year motgages and having to refi every so-often.

Thanks,

Matt

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Originally posted by @Stephanie P.:

You should try to do the 10 conventional loans first because the money is cheaper, but with portfolio/commercial rates in the mid 4's and 5's on a 30 year fixed for a 1-4 unit property, I see more people just foregoing the hassle of income verification, particularly since Covid

Stephanie

Stephanie,

I figured that would be the answer so I thought I would ask. Honestly, mid 4's-5's is not a terrible interest rate anyway. 2 years ago I bought a 5% conventional down home to house-hack and got a 4.875 interest rate, so I got a bit used to the higher rates. Of course I would love to be in the 2's and 3's, but I baked in a 5% interest rate into my deals and they still work gret at providing a huge block of cash-flow so I cant complain.

Thanks for being a great resource in terms of financials and lending for real estate btw. Lending has been my weakest part of real estate for a while now and I think I am finally understanding the ins and out of everything.

-Matt

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Originally posted by @Whitney Hutten:

@Account Closed I went to commercial loans to keep my properties separate (though portfolio is a valid way to go). I will say, once I started down the commercial path, doing a conventional loan is like hot pokers under the fingernails... you probably won't go back!

Whitney Hutton,

Do you say the "hot pokers" comment because commercial loans are easier to acquire, or does conventional stuff just require too much documents like bank statements and proving income? I was under the impression that commercial loans to an LLC had a significantly higher interest rate than conventional lending products. If thats true, I would begrudgingly do my 10 conventionals first.

-Matt

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@Mary Aviles

When you have done portfolio loans in the past, are you refinancing a handful of properties with the loan after you have acquired them ? Or can you purchase a single SF home using a portfolio loan, gain a few, and then refi to have the portfolio cover multiples?

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@Ryan Hoover

This is awesome man. Congrats. I have been doing this exact model of buying homes and rehabbing to add value and boost rents. Your rehab looks very clean. Keep up the great investing work.

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@Shawn G.

That sounds pretty awesome. I just cant seem to get behind the virtual stuff. I will definitely attend in-person meetups at some point. Im just a more casual person so i prefer the bar atmosphere to a more formal thing you know?

Post back in here when the meetups start in person again. I know we spoke through PM as well.

-Matt

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Orlando, Florida

All Forum Posts by: Matt Nico

Matt Nico has started 21 posts and replied 429 times.

Post: When do your rentals typically start making money/making sense?

Post: Buying a Property without a Realtor

Post: BRRRR more than 10 properties?

Post: Why Real Estate Investors Should be Their Own Agents

Post: BRRRR more than 10 properties?

Post: BRRRR more than 10 properties?

Post: BRRRR more than 10 properties?

Post: BRRRR more than 10 properties?

Post: Long Term Rental Renovated to add $500 cash flow

Post: Orlando Virtual Meetup