All Forum Posts by: Menachem Krasnjanski

@Justin Bauer yup, there definitely are angles. The question is whether it's worth the downsides. It's a pretty horrible property.

@Ronald Rohde I own motel 6's

I'm trying to figure out if it makes sense to buy the following property. It's a 2 star motel in a midsize city in the Midwest with more than 100 rooms on over 2 acres of land. It's being sold at a sheriff's auction and the current highest bid is about 3k per room. The owner also owes about 2k per room in back taxes. For an all in of about 5-6k per room I can acquire an operating motel. The downsides are It's a very mediocre motel and leaves alot of room for improvement, it's next to 2 other 2 star motels that are part of national flags that have much better reputations, and most importantly it's a sheriff's auction so it's very hard to get any info on it (P&L, past performance, any other financials). Is it worth going into such a deal due to the low cost of acquisition and upside.

@Carini Rochester thanks for the reply. I'm with you, I'm bouncing this off other people to see what other people think. For all the reasons you said it wouldn't make sense to sell. The property that were looking at has the cashflow to cover a high rate on a loan. We have a cushion to deal with the rates continuing to increase as well.

have a question in terms of my portfolio. My partners and I have a property that appreciated 50 percent in value this past year. I got an offer for SBA financing off of the new equity that can be leveraged to triple our portfolio, but it 1) comes with a personal guarantee and 2) is tied to the prime rate which is high. The property would cash flow well and give us a great cash on cash. My partner wants to sell the property and hold the cash in the bank while waiting for enough of a dip that we can get a really good deal with the profit. Which way makes more sense to proceed. Thank you.

have a question in terms of my portfolio. My partners and I have a property that appreciated 50 percent in value this past year. I got an offer for SBA financing off of the new equity that can be leveraged to triple our portfolio, but it 1) comes with a personal guarantee and 2) is tied to the prime rate which is high. The property would cash flow well and give us a great cash on cash. My partner wants to sell the property and hold the cash in the bank while waiting for enough of a dip that we can get a really good deal with the profit. Which way makes more sense to proceed. Thank you.

I have a question in terms of my portfolio. My partners and I have a property that appreciated 50 percent in value this past year. I got an offer for SBA financing off of the new equity that can be leveraged to triple our portfolio, but it 1) comes with a personal guarantee and 2) is tied to the prime rate which is high. The property would cash flow well and give us a great cash on cash. My partner wants to sell the property and hold the cash in the bank while waiting for enough of a dip that we can get a really good deal with the profit. Which way makes more sense to proceed. Thank you.

@Reid Smith Makes sense. Our lender clarified to us the rules for refiing. They gave us a 5, 3, 1 term. 5 percent prepayment penalty in year 1, 3 percent year 2, 1 percent year 3, after that no prepayment penalty.

@Reid Smith We still have the loan offer sitting on the table. However, one of my partners doesn't want to borrow at such a high rate so we haven't pulled the trigger yet.

@Mike Hern thanks for the reply. I'm asking about 2008-2009 because I'm trying to conservatively underwrite and so I'm trying to see what kind of potential revenue decreases can be expected to underwrite for that.