All Forum Posts by: Patrick S.

Hey @Derek Persuit, first off, congrats on the success thus far! I'm not an expert by any stretch, but I do like to explore my creative financing options.

As far as your situation goes, have you tried several local banks and credit unions? They're *usually* more willing to work with you on these types of deals. You're going to have to get a cash-out refinance, which is essentially a reverse mortgage, and you'll probably have to settle for 75% LTV or less. In your case, that's only a $50k loan, which as @Timothy Hero pointed out isn't very appetizing for most lenders.

Another option is to continue acquiring properties (2+ more, specifically) and getting a portfolio loans. The rates probably won't be as good as the rates you're paying on your rentals right now, but it gives you the ability to roll all of your properties into one loan. There's typically a $500k portfolio loan minimum though, so it entirely depends on how much your loans are on those other properties. In which case, you might have to get to 6, 7, 8, etc properties before you meet their portfolio minimums.

Last option I'd try is a HML that is willing to take on the risk. You'll pay a high interest rate, maybe as high as 10-12%, but you'll be able to pull that equity out of the property, if it's that critical to you.

Hi Charlene,

BP is acting up on me this morning, so maybe that's why, but I don't see any links or photos or an address. Any more info on this listing? Thanks

Patrick

I stand corrected. The program is through Eskenazi Health Midtown Residential Services. Anyone dealt with this before? Thanks

We're looking at a 4-unit property in Indianapolis, IN (Marion County). We've learned that 3 of the 4 units are occupied by tenants on some type of HUD program. We've yet to determine which one, but we believe it's some type of homeless assistance program. Hopefully the seller knows and will tell us. Are they obligated to share this information? The seller pays the majority of the utilities, per their leases (which we've confirmed from the PM's billing statements that we've been provided).

Is anyone familiar with the Marion County HUD programs? Are they similar to Section 8? Is seller-paid utilities part of the requirements of the program? What are the watch-outs with this HUD Program? Who should we contact to get more info and what questions should we ask? If the seller can give us more info, I assume we can call the HUD office and answer most of these questions for ourselves. Really curious who may have experience with these and what advice you can share. Thanks in advance for your time and advice.

Patrick

Agree with many of the others on here about M2M and/or a co-signer.

One thing to keep in mind about college grads: They're not used to managing money. Sure, they've held down a part-time job while going to college. Chances are, mom and dad might've been kicking them a subsidy for their phone bill, groceries, rent, utilities, etc. Chances are, their rent was much cheaper in a college town/apartment than what it'll be in the real world. Chances are, they had some old beater car from high school that was paid off and insurance was cheap. The real world is attractive. The big paychecks are attractive. Before you know it, they're buying a brand new car, going on shopping sprees, eating/drinking out a lot, and generally just enjoying the feeling of being so "wealthy" from that new job. If rent doesn't get priority, they can start missing those payments pretty quickly, even at 4x monthly rent.

Brian Adams and Upen Patel - Thanks for the info. Sounds like it's a safe bet to budget for at least 1%.

Someone in Indianapolis HAS to have experience with this. Don't be shy!

@Upen Patel What do commercial broker fees typically run?

Great info here. Thanks OP for posting and everyone else for answering. Already learned a ton, for example net worth >= loan amount. That seems odd considering you're borrowing for 1. Leverage and 2. Because you don't have that much money. I believe it, just didn't expect it.

@Dylan Bensinger Classic Silver looks pretty good from what I'm seeing on HD's website. I think the main point is to keep everything neutral and something that hides old stains as well as new ones. I'm no interior decorator so maybe that color doesn't go as well with "everything" as beige would. Someone else's department there.

I would absolutely use a semi-gloss, at the least, in a kitchen or bathroom, especially in a rental. The glossier it is, the more it repels stains and moisture. When it comes to the rest of the walls in the house, flat paint marks and stains easier. It hides better, but I can all but guarantee you'll have to repaint the entire house between renters, as opposed to just touch ups.

While I'm thinking about it, consider rewiring your bathroom fans in your rental units. Put the light and the fan on one switch. That way, if you get a tenant that likes to take hour long showers with the fan off and door closed, they won't be able to and you won't be dealing with moisture, mold, and peeling paint issues down the road.