All Forum Posts by: Michael Moikeha

I know that commercial lending works different that residential mortgages, but my question is more about what these lending institutions are looking at when they are making their decisions.

1. When crunching the numbers, do they put any weight on the numbers for your projected NOI after planned rent increases and expense cuts?

2. What range do they look for in your DSCR?

3. In a new LLC, what do they look at for leverage?

4. What am I missing? :-)

Thanks for the help!

Wow ... So this is what I may be getting into in the near future. Thanks for all the great stories and warnings.

I would also suggest searching out your closest Real Estate Investment Group. Make sure to do some research so you avoid the groups where the owner is basically trying to get money from you to fund their deals.

Once you find a great group, network and find urself a great mentor who can help you along the way! Nothing beats a great mentor who has become successful in your local market. Just make sure to take them out for a beer every know and then to thank them!

As a beginning invester in MF homes, it is typical to accept lower cash on cash. An 8% would be good for your first place, if u were okay sitting on it a while. An average would be to shoot for 20% and settle for 15%.

You want to calculate for Net Operating Income, which is gross income less operating expenses.

Then you take your NOI divide it by your cash investment.

On a single family, a 200-300+ month is good. For the most part, u treat duplexes about the same.

a 1031 exchange is selling the property and using the capital untaxed to purchase another (typically larger).

That doesn't really work if you are not selling the first place though, unless I am missing something?

In this case, the best option would be the LOC as the downpayment which is allowed on most cases. If not, find a place that will! Many people leverage one property against another.

I did a quick search and didn't find anything. Is there any sample partnership agreements specific to REI that someone could point me towards?

Me and my partner are in the same boat.

If someone could verify the following statement I heard that would be great. I was told by a seasoned investor that a bank will not give a loan to a new LLC for a residential home. Best option is to purchase it under personal credit and transfer the title to the LLC. This invester has 4 personal loans out on rental properties, that she has or will transfer the ownership over to her company.

Does this mean the mortgage is no longer under her name?

Depending on how this works out, this could be the route to take when starting as partners pre-LLC.

@Justin Williams

I had a few questions for you. I like to pick people's brains and see what strategies they like to use, as everyone has a different approach.

1. How closely do you stick to the 70% rule in your flips?

2. Many people say that in the flipping niche, using a broker isn't the best as the good deals don't make it to the MLS. Thoughts?

3. What are your stats on success rates throughout each stage? I.E. Offers per contract. Contract per close. Closes per timely resale?(obviously the last one may be harder to measure, but how many do you hold onto longer than planned.

4. Someone earlier asked your return per flip, and you said it varies based on property, as some you buy at $70k others at $400k. Is there a ballpark percentage for your ROI?

5. What is your goal ROI when deciding to purchase a flip or passing?

VA loans are super tricky. As I am looking into the many different options of getting unto the real estate market, I spent some time researching VA loans and what could be done. Your best option is going to be contacting a local rep.

I have been looking into the same niche, and the best thing you can do is use the resources found here, and network with your local REI group. Between those people, and the people here, you will find 90% of the knowledge needed for MF investments.

Good luck!