All Forum Posts by: Mordy Chaimovitz

Yearly rent raises are an important part of the real estate investing business model in general and have many benifits aside from cash flow. It will increase your cash out if you refi with a dscr loan for example.

However, It seems you have a nice relationship with your tenants and that might be worth more to you than the $$$. There are some things money cant buy, and real relationships are one of them!

I personally would have a hard time with this, so I have a property manager that takes care of my tenants. There are many benefits to a property manager but for me this is a big one. I dont have personal relationships with my tenants and I am able to focus on the business side of the investment, while still being a caring landlord and taking care of them, as we all should.

I think it would be fair to give them some lead time on the rent raise. 2 months before lease expiration; Explain to them that you really want them to stay and you hope they will, but taxes jumped, and you will need to raise rents for the upcoming lease renewal.

You want to give them time to decide if they can afford it or if they want to look for another option.

Chances are they will stick around with no harm done.

Good luck!!

Andrew gilman from northline property group manages my properties in chicago. I am very happy with him. You can dm for contact info. 

Hmmm

Everyone and their mother are looking high and low for deals that meet the 1% rule. This looks like it would exceed that criteria. 

find a property manager, rent it out then refinance it and Brrrr till the cows come home!

Once its rented take out the equity and buy more! This property can make you very wealthy if you do that! 

Dont sell! BRRRR!

Dunno, my property manager deals with my tenants. Never met my tenants. Glad for it too. 

 We have connections with 300 lenders across the country. DM me and I will try to help you out. 

Find a broker you trust and make him/her part of your team. A good broker doesn't want to sell you a product. They want you to succeed. 

Here are some pointers in the CRE financing world.

1. You need to have a networth equal to the loan amount

2. You need to have liquid assets equal to 10% of the loan amount after you paid your downpayment and closing costs. 

3 it is easier to get better rates and terms in a large market such as a big city as opposed to a small town. 

4. On average you will need to have a dscr os 1.25

5 On average you will need to put down 25%

6. If you dont fit these criteria you can sometimes get a hard money loan with very high interest rates

7. If you plan on refinancing out of a hard money loan in the first 2 years after acquisition,  you will only get up to 80% of your total costs, NOT 80% of the value (and its usually only up to 75% of costs)

8. Lenders look at your experience on the asset class when determining your eligibility for the loan. 

there is a lot to learn in this area. Feel free to dm me for more details over the phone.

Take out a blanket refi on your SFR portfolio and use the proceeds to buy a multi.

Doing top grade finishes needs to be supported by the type of buyers in that area. Does the area where your property is in demand top shelf finishes? Or are you making it nice because you want to take pride in your work? Flip your house for your target market. 

This is an important question based on the premise that interest rates are pretty universal.

lets evaluate your portfolio for a moment and see if this is really true.

Are you looking to refinance one property, or a portfolio of a few properties?

Is your property a single family or a multi?

If you have a number  of single family homes or a multi-family building with 5  or more units you can refinance with a commercial loan. In the commercial lending world, rates are anything but universal. 

A portfolio of SFRs can be refinanced with a blanket portfolio loan using a local bank or credit union.

These lenders often base their rates on  different benchmarks and spreads which can get you varying results.

Just as an example, I got 2 different qoutes from banks this week on the same property. One qoute came in at 5.9% (yes i know prime is 7% today) the other came in at 6.75%. That is a difference of 85 BPS! (These lenders don't use prime as a benchmark. They aften use the treasury yield or SOFR and add 2% or 3% on top of that to come up with their rate)

In addition, Rate should not be the only factor in choosing your loan. Amortization is a big factor as well. If one lender will offer 20 year amortization at a lower rate, while the other might offer 30 year amortization at a higher rate, you might be better off with a higher rate amortized over 30 years, because it will increase your cash flow. 

Recourse vs Non Recourse is another very important factor in choosing a loan. Many multi-family properties can qualify for Agency Non recourse loans. This means that if for whatever reason there is a default of the loan, the lender can only collect from assets owned by the LLC not the individual.

Also keep in mind prepay penalty. I just had a client that chose a higher rate to change his prepay penalty from yield maintenence to a step down prepay because that was a better choice for his exit strategy.

Lastly. when you are looking for a lender, look for someone that works for you. not for a bank. A good mortgage broker should look out for their clients and work with them to get them the best terms for their deal. Not just in the short term by selling you their rates, but in the long term by giving you knowledge.