All Forum Posts by: Michael Glaspie

@Rick Novotny I agree with everyone that multifamily will be the fastest growth. If you wanted to continue to leverage the Fannie/Freddie limits that you and your partner have, you could use Delayed financing on 1-4 units until you are capped. This would allow you to use this Line of Credit and essentially acquire more units with no to low capital. This would just be icing on the cake. The real rapid growth would be the multifamily. 

Some obstacles:

1) Zoning from commercial to residential

2) Having appraisal showing 4 instead of 5 units

3) Owner/occupied loan must be in your personal name

4) The current contract must be assigned or sold to you as new "owner".

All in all, it is not too complicated. Not sure of the full financial picture. But you can also pursue a commercial loan to take over the owner finance deal. You have a few options. 

@Charlie Moore i agree with @Jason D.. Charge an applilcation fee. That narrows down the pool even more. Attempt to add more filters to narrow down the pool.

Value add opportunities:

Snack Vending Machine

Laundry detergent/dryer sheets Vending

ATM Machine

Conversion to electronic systems would be a larger CAPEX expense but would cut down on manual labor of collecting coins and converting the coins.

All in all, I would recommend evaluating what your business plan is to add value. What profit is to be expected for each addition. Your exact breakeven point. See if the seller is willing to owner finance. 

It sounds like you have done a lot of homework and you are ready to move forward. Best of luck and please keep us informed on your progress. 

I would do an open house as well. It will foster a spirit of 'competition' amongst the applicants. This would bring serious clients to push an offer and move up the timeline. 

I would also advertise "urgency" in the form of (accepting applications for 7 days only) type of thing. Whatever trailing scenario you want to use is up to you. But if you have this many interested applicants you need to thin the heard and get to the serious ones.

@Brian Babbage look into a Qualified Retirement Plan (QRP). This will give you a much wider range of investment opportunities. And @Michael Seeker is correct with the ability to withdraw contributions with 0 penalty. It is when you withdraw gains, employer contributiions, or interest earned is when you begin to see the taxation. And as long as you roll it over, then you can avoid the early withdrawl penalty as well. As you are aware, if you closed the account you would be hit TWICE; 1) on gains, employer contributions, & interest and 2) on early withdrawl penalty. 

As long as you have considered all of your options I dont think there is a right or wrong answer. 

@Spencer McNeal is right on the money. Those sites are perfect too. I use a large portion of those same sites. Here is a list of other sites you can dig into to look up the same/similar information. 

Milken Institute's Annual Ranking of Best Performing Cities

Local Market Monitor

FFEIC.gov

census.gov

ERBI

Some of these you may have to dig a bit deeper and some you may have to pay for. But honestly, if you were to google the topics that Spenser mentioned you may be able to find addtional websites and resources as well. 

I would say pay it off. You will continue to accrue cash through rentals. You can also secure a very genrous HELOC for more investing power. Between those two, you can really leverage some large investments. I dont think its a bad idea at all. This would be a conservative play where your cashflow is fairly gaurunteed. There are more agressive plays to be made, however with the HELOC you can play those games if you'd like.

I agree with going with a personal loan over a commercial loan. There are owner-occupied loans (FHA, USDA) that allow you to use very little capital on the upfront costs, which would allow you to use the other capital for either repairs or reserves. You can find a home that's a little beat up and put in some sweat equity. And if you conserve enough capital to furnish one of the bedrooms outright you can Airbnb. The key is to try and find a home you can afford, then find as many ways to increase income to put you in a better position for the next one.

keep it. however you can. you would be extremely upset if you look back 15 years from now and saw how much the property would be worth or what it would rent for