All Forum Posts by: Matthew Spiers

Good morning everyone! I'm in a bit a predicament and need some guidance. I've got a 4-unit construction project I've posted about a couple of times and have had some great feedback on. Currently I've come across this issue:

I've got a GC that's been doing well on the building side, but lately I've come to realize he's just a shell contractor and in his quote didn't include any of the sitework I need done on the project. Being a 4-unit in Cape Coral, it's considered a commercial building and thus has a lot more sitework than if it were just residential. Unfortunately, after maxing out my current loan for $720,000 to build, I've come across another $200,000 in sitework costs.

The appraisal on the property back in 2021 was $1.2 million (I think I can hit $1.3 million by now) and most lenders seem to offer around 80% LTC and LTV so I believe I can get the difference in a refinance; so I wanted to see if there are any lenders here that offer really flexible LTC and LTV loans that can help me finish the project or if anyone has any alternatives to offer. I've made absolute magic work to get this project done and need some real guidance, especially after I've learned throughout this process that most specialists (architects, engineers, etc.) only cover their exact box of scope and offer no additional help along the way.

Each unit will easily rent for $2,200-2,500 per month so covering the loan after I'm done with construction is also not a concern. Thanks in advance to anyone that can help.

 I think after reviewing it, that Lender A's just looking at one portion of closing costs. I don't think what they said is all-in after looking at cost breakdown.

 Ok awesome that's exactly what I'm thinking too. One of the lenders flat out ignores my emails until I call them and then they're responsive. Not a very good way to start out. 

 Thank you, that's kind of what I'm thinking. At this point it doesn't seem worth focusing so much on the points/fees/equity being that the remainder of the construction's only 4-5 more months. So trusting the lender seems better at this point.

I've posted a couple of times about a 4-unit that I'm building. I initially got my HML in December of 2021 but after some increases in costs and wanting to extend my loan deadline I'm in the process of a refi (I know it'll cost me and at higher interest but I'm doing the refi for peace of mind).

However, after trying to pit two lenders against each other a bit I've gotten two deals that I can't decide between and would appreciate some experience investors' or lenders' feedback.

Lender A) $840,000 loan total, 11% interest, 1.5% origination, $12,000-15,000 in closing costs (possibly out of pocket, still confirming if it's cash to close), appraisal not done (waiting 3-4 days).

Lender B) $833,000 loan total, 11.5% interest, 1.5% origination, $30,000 in closing costs rolled into the loan with $0 cash to close, appraisal done, ready to close tomorrow as soon as insurance docs are updated.

Additionally, Lender A is my current lender and offered me way lower, $735,000 initially, only upping it when I told them I was shopping the loan. And I found Lender B from my current lender's recommendation (another department recommended them), so I'm a bit surprised my current lender referred me to an outside lender instead of their in-house refi team.

Please save any comments about interest rates; it's a HML for a construction project with plenty of equity. I've been leaning toward the "get it closed and over with" mentality all day but I keep wrestling back and forth with keeping the loan in-house with my current lender. Them upping their offering last minute has also left me surprised and with a bit of a bad taste in my mouth.

Any other guidance is greatly appreciated. Thank you!

I totally agree. With my background being more in the long-term rentals and seeing the benefits of having a local, high-touch management company and then going a full 180 to these larger management companies it's just not worth it. Some charge an arm and a leg but it seems like a good number of companies out there locally can still work with you based on the services they offer. 100% recommend someone local if I were to stay in the STR "game."

Thank you I will definitely be checking that out if we get back into it. We didn't get much cash-flow from this one specific one and I think a lot of people here are saying that you need some of the scalability. I definitely see some pitfalls of self-managing but if we get back into it my opinion would be exactly what you said: find a good local manager that's committed to good results of managing the STR.

I love a lot of the discussion going on and I can definitely see the shortfalls of possibly self-managing and instead getting a dedicated local PM. Your reply here looks like it properly sums up what I'm thinking if we get into the STR game again.

That was what originally steered us away from them. The 30% is honestly insane in my opinion for what seemed like an equal service offering from Evolve. I'm not sure how good they are but Awning I think was another as well.

We did for a while and unfortunately this property wasn't cash-flowing a whole lot which is what made us get out of the STR game. But for anyone looking to avoid this I would either self-manage or find a good cleaner that manages as well. That seems to be somewhat popular and I think would be easier going forward.