All Forum Posts by: Michael Y.

@Linda Weygant First off, very helpful. I know the thread is fairly old, but quick question. 

The loan that you got in the LLC that you personally guaranteed, is that a commercial loan or residential? Curious if you can get a residential loan in an LLC if you personally guarantee it.

One of the statements that is always made is "A good deal is made on the purchase"

Have you thought about purchasing the property below the market value? That will increase your returns to get your cash on cash into the double digits. 

First thing that I noticed is the 100% occupied, I would run projections based on having some units vacant for a certain period of time. The rehab is fine per unit as a light refresh, but I would make sure the existing building doesn't need repairs or larger rehab items if needed as you didn't budget for that. 

@David Barnett @Adam Tafel

Thanks David, helpful. Let’s say they are under 10, and had 7 outstanding mortgages. Unless you had a very high income, I would guess it would be difficult to keep getting mortgages in your personal name. Am I off on this?

@Adam Tafel

Hope I'm not switching the topic, but I think this adds on to the conversation. I've always been curious as I grow my rental portfolio. Do most people with larger rental portfolios use commercial loans in an LLC ?

The reason I ask is I can't imagine that if you have 15+ loans outstanding that a bank would still lend to you personally unless you had a very high paying job as your DTI would be very high.

Seems like a lot of people have numerous loans across their rental portfolio so curious as how they make it work.

@David Avetisyan

Agreed, I will speak with my accountant.

But If the properties are positive cash flow it won’t limit the amount I’m qualified for?

Does have mortgages on your investment properties effect your ability to get a mortgage for your personal home?

Currently renting and concerned that if I have a few mortgages on my rentals that I won’t be approved for a mortgage for my own house, or be approved for much less.

Is this a concern? How do banks look at that debt on investment properties?

Hi All, 

Hope everyone is staying healthy and safe during this crazy time. I have been learning for close to a year now, and really looking to purchase my first real estate investment property soon. Where would you recommend to start? Single family? condo? duplex? 

I recently found a single family home near my home that I think could be a great opportunity. Purchase price I think I can get down to $75k and comps in the area support a $220k ARV, and could even go higher. After running the numbers; 15% down payment, rehab, holding cost, selling cost, etc I would be out of pocket around $110k plus mortgage amount (rehab being a vast majority of that). While that is possible for me, I still think that is a lot of cash to be out of the pocket on the first investment property. I don't necessarily want to take out a HM loan as I have the dollars to do it myself, and would seem like an unnecessary added expense.

How would you recommend that I start my real estate investment journey? Am i just being nervous, or should I start smaller, and if so how? 

@Whitney Hutten Very Helpful! 

Just thinking outside the box, and let me know if this works. Could you potential use a hard money lender for the acquisition, do a conventional rate and term refinance rate after the rehab, then after it is seasoned 6/7months do another refi do pull out some equity. 

@Whitney Hutten Appreciate the response, and that actually is a great jumping point to my next question. Obviously someone would like to refi our the HM given higher cost of capital. If their any risk that traditional financing will deny the deal again after your rehab? 

Also, can you elaborate on on your sentence below. Why don't you need to wait for the property to season? 

"I also like it because I can do a rate and term refinance right after the rehab and not have to wait for seasoning requirements."