All Forum Posts by: Melanie Eden

Hi Conrad,  you have some options. 

1. quit claim the properties to your personal name and refy with a lender that will do a 30 year fixed.  then quit claim the properties back to the llc at the closing table with title company.

2. work with waterstone bank, sunset bank, or peoples bank and refy on a commercial basis and avoid the quit claim.  the sad deal is rates are higher and amoritization schedule shorter on commercial loans.  ARMS are the norm, with 20 year am.

i can provide contact numbers if you wish 

Hi Adam,

you have received some really great advice here.  My suggestions include, focusing on an area.  the more properties you own on a particular street, area, zip code, the more you can rent control the area.  Also, Make sure you a pre-approved to refy after closing.  Purchase in cash, refinance once the closing is final, repeat.  You can use the same cash, wheel and deal on  better purchase prices and refy up to 10 homes on 30 year fixed loans at great low interest rates.  The 10 home deal changes on a regular basis (it could change at any time).  always work with a local lender who specializes in working with investors as they are a great resource on rates and lending programs.

welcome to BP! I am a broker in Wauwatosa and manage approx 500 units.  happy to answer any questions you may have.

Hi Nate,  you are paying way too much for the insurance. I have owned non-conforming duplex's in the past.  I am happy to refer you to the agent who does my insurance.  my memory says around 1k in annual premium.  since you are not insuring contents the cost is lower. feel free to email me and i can provide the agent contact info.

I always keep the commission to the selling side at 2.4%, the smaller the sales price the higher the commission I offer on the selling side.  These properties tend to be lots of work with little income on them.  As a broker, investor and seller paying someone to show and sell your property is important.  On more expensive properties there is more commission discussion as the numbers are bigger.  I take this case by case.  If the seller is a regular buyer as an investor, discounts apply in my mind. You have to use your judgement on the client and situation.  there is no hard and fast rule.

if your lease does not specically say the tenant is responsible they may have a case.  i would check your lease on what it has in the plumbing section.  my lease says all drain clogs after 30 days are the responsiblity of the tenant.  that being said, if the drain clog is not solved bigger problems can occur.  i remind the tenant of the plumbing item in the lease, tell them i will send someone and then bill the tenant account.  a vacancy over a drain is not worth the cost.  it does not matter who is right or wrong, just what it costs.

ask for a copy of the water bill.  contact the water department.  sometimes, depending on the city, they will send someone out to look for leaks.  if it is underground, it would not hit the meter, so the leak is definately after the meter or the city could not bill for it.

it can be negociated.  depends how badly the buyer wants the deal.  If it is a got to have it property, write in the offer the buyer to pay buyer and seller closing costs.  If the deal is on the fence, buyer to pay buyer closing costs.  as a rule i typically do not offer to pay a sellers closing costs as they may have a bunch of unpaid water bills, back taxes, fees... it is a risk to leave the language vague and assume the seller is being honest.

Marcus is very accurate in his statements. lower end properties tend to only make money on paper, however, in real life not so much.  the other concern in shaky neighborhoods is the break in cost.  the properties need to be boarded up from the back entrance points in order to protect the water heater, furnace and all the supplies at the property.  My point is inexpensive does not equate to making money.  Better to purchase in a solid area with a high degree of folks who work.  This way you can believe the buyer will be able to get financing.

A VA loan on a 4 plex will give you great rates for the next 30 years. You will never be able to outperform that again when calculating cash flow. You have to be willing to live in the property and the pro's and con's that come with multi-family living. Focus on a higher end area since the rate and down payment will be so low. Long term the tenant class will be better. great strategy to get started.