All Forum Posts by: N M Clarke

@Jon Schwartz

Thanks again for the feedback. I think the deals are happening but that he does want to stay and get some savings. On my end I just don’t want to compromise my rights later, to your point? How do you suggest structuring the concession to preserve rights later? I’m told free months rent etc are factored in the average rent over the term of lease and that determines the current rate for any future rent increases.

@Jon Schwartz

Thanks Jon. Tenant does not have financial issues. He just sees that there are deals out there and is asking for reduction accordingly.

Does the rent control apply across all CA? Or is this LA specific? I thought any COVID related deductions were allowed to go back to previous rate, if the market supports it.

One of my market rate units has asked for a -15% monthly reduction. The press out there has been brutal about how much vacancy and drops in rent, which include a lot of new developments downtown that were super high and skewing the median. Property manager says he's seeing these requests daily and I've already had one ask a few months ago for a different property.

What are BP folks doing? Are you guys making some concessions now? Are they temporary or are you locking them in for a year and raising them up again when market rebounds? We are in a strong rent control market. Any advice or stories shared appreciated.

@Denise Brown-Puryear

Thanks for the feedback. Good luck with the future 1031. May I ask what kind of rates you got for asset backed financing?

@ Alex Bekeza Thanks for the tip. What kind of rates are we talking about here? Are they non-QM?

@ Scott Lundgren Thanks for the detailed response and offer to jump on a call. So when you say working with these lenders will cost me a couple more points, are you saying interest rates >5%? Can put more DP up front depending on the cash-out portion.

Plan still remains buy and hold, so don't think I'd be doing any 1031 anytime soon, though a personal property I have in Manhattan (former home) is barely cashflowing with 70% equity at this point, so I will probably will sell and exchange into a cashflowing investment. Given the buyer's market in Manhattan, I'll probably hold on for a while. Investing out of market seems a little beyond my scope at this point to take on.

@Jo-Ann Lapin
Thanks for the tip. I'm assuming the rates connected to Hard Money will be quite high, which could be fine if it was temporary. But if the trust properties will always default to personal guarantee, there's no way I can ever get refinance into a conventional loan. Even last year where my 1040 showed >$500K (not incl my spouses income), there's only so much you can finance on an individual salary.

I'm just wondering how people are able to amass larger portfolios, since underwriting on personal income will limit you.

@ Frank Hinck
Appreciate the suggestion. Certainly feels like I am going to have to go down the list in CA and dial for dollars and see which will lend and at the best rates. The cash out will be used for a down payment for MF (+5units) since my recent experience has been that they don't care as much about your personal income/job, rather than the financials of the property in question. It had enough cash flow after debt service, I put 36% down, 1 year interest in reserves and was able to get a good rate.

Just wish the SFR lending was less rigid and driven by FANNIE rules and its obssession with W2 income.

It does feel like I need to find one last big job, finish all my real estate deals, and then retire/downshift.

@Basit Siddiqi
Thanks for the reply.  Yes, I recognize that my situation is a little more unique but I do think there are people like me out there who have equity and reserves but no W-2.

What concerns me most it that it seems there's no way around having a W2 job if I want to continue investing...Part of the attraction and goal, which I'm sure for a lot of folks on BP, had been to establish enough passive income to focus solely on real estate investing and retire/downshift/etc.

Now if you have all this equity and cash reserves, what is the roadmap then? Also having a personal guarantee caps your potential because most people do not have super high salaries and can finance the world. My personal portfolio includes 3 NY properties, and 1 MF in CA (closed recently, loan initiated after I was already "self-employed.")

Anyone else get cash out from just high equity?

I have 4 properties (2 MF, 2 SFR) in California in a trust LLC. I am the sole trustee and also one of the beneficiaries. All properties are owned free and clear (no debt) and we would like to cash out refi so we can finance some renovations to one property and to purchase another multi-family and grow the portfolio. Targeting approx $1.6M cash out, which would only be 17% of total value of portfolio. LLC generates good income because property tax is low (properties purchased in 70s) and relatively low operating expenses.

My understanding is that lenders look at my personal income rather than the LLC income to determine max loan amount, which is problematic because I just resigned my high paying position in Aug.

How do investors tap equity in these instances? Any advice greatly appreciated.