All Forum Posts by: Mike R.

Hi...anyone change over a building to water sub-metering?  I'm not talking about a RUBS process but actual sub-metering.  if so, how did it go?  anyone do this in Washington State?

curious how long is your fixed rate lock on the commercial loans?

i believe you will need to use a commercial loan. FHA/traditional loans are limited to no more than 4 individual loans per person (you can't buy in the LLC name) and no more than four units (doors) per loan. Or so I think........

Hi,

anyone have a name of an excellent real estate attorney in the Port Orchard/Bremerton/Silverdale Washington area?

crazy isnt it...they're debating the same thing in Seattle (gee what a surprise given they elected a Socialist to the city counsel).  just look in your neighborhood of San Fran--how has rent control worked for them????  how about NYC???? maybe someone from those areas can share how they make a reasonable return on their investment...it may be possible i just dont know how.  

 as a current landlord i would do the simple math and figure out how much you need to get paid for the risk you are taking and increase the rents NOW, to the extent possible, before the control gets put in place.  

i wouldnt be a new buyer/landlord in an area with/or considering rent control.  Once controls are in place, owners will make few repairs/improvements because they wont earn $ for the work/risk.  Then the city will enact an "inspection" requirement (which you get to pay for--already in place in Seattle) before you can rent a vacant unit..the city gets to tell you if your rental is up to snuff or not (sounds like section 8 housing  but without the regular paycheck coming from the govt).  i dont see how any of this is good for an investor

can you tell the seller to fix the mold so the deal can close?  unless there is something really strange with this individual appraiser (which could be), i would expect another buyer with another appraiser would have the same problem; therefore it is in the seller's best interest to deal with the issue.  

hi and thank you for your help!

recently closed on a property and we are finally getting things in order.  However, we have two tenants who are on month to month based on the prior owners leases.  we don't like the language in those leases so we want to move to an annual lease based on our language.   However, we would rather not renew one of the tenants but are OK renewing the other tenant.  can we do that without creating a potential "discrimination" issue?

 Eric,

you probably know this already but if you move forward with this deal, ensure that you get the last year or two of expenses confirmed.  asked to see the actual utility bills (that you are responsible for) and any other expenses.  i dont know your area but 1200/yr--$100/month--or about $25/month/door sounds very low.  i cant tell you how many times i have seen seller quoted expenses come in much lower than actual....they use last year's taxes instead of this years, they dont include yard maintenance or property management fees, etc.

we recently did a commercial loan on a 6 unit that had 25yr amort, 10yr balloon with a rate of 5.125.  the lender was "local" but worked for a well known/national bank and the deal details remained fairly consistent from soft quote to actual close.  the loan amount wasn't large (about $400K) but i think the biggest driver of differences between the soft quote and final details is the appraisal, your credit rating and the ability of the building to support the monthly payment.   

i think what helped us get a reasonable deal and no games by the lender was that we were very open with our plans.  we discussed our short term and long term goals with the property and our RE investing.  I also shared the detailed numbers that i worked up on the property so she knew we knew what we were doing.  in fact, they said they wished all their clients did that level of detail.  i think that last point went a long way into providing the lender with comfort that we were a low risk borrower.    Prove to the lender that you know your stuff and you can get the loan specifics you want.....

Marvin,

I mean this with utmost respect, but please do buy these buildings until you have a better understanding how this RE investing thing  works.  Take your time, read as many books on RE investing as you can find, spend months on this website reading all the posts.  And while doing this "internship" you should use websites like Redfin.com to analyze what properties are going for in your chosen area.  Write a business plan (doesn't need to be fancy/formal) that says why are you investing, what are your goals/timeframes and what type of properties you want and why.  you will want to refer back to this business plan in the future…..then, and only then, should you consider entering into a deal

Cap rate is net income (excluding debt service) divided by selling price.  lets take the 12 unit building….4400/month * 12 months=gross annual income of $52.8K less rent reserves and expenses of say 50% (your research should tell you what expenses are reasonable) leaves you with $26.4K in net income.  $26,400/300,000=8.8% cap rate.  is that reasonable for your area?  if you don't know, then you shouldn't spend your money.