All Forum Posts by: Peter Goran

Thank you so much for your answers!

Hi everyone,

My wife and I are looking to buy a single family home in the US, however we were hoping the bank would include both our salaries for the loan. My wife has a W2 form, however, my job is outside the US and hence I do not have a W2.

Do you know if there are any lenders out there that would also consider my salary, given that I have no W2?

Thanks,

Peter

Hi,

We are considering investing in a commercial property out-of-state. Given that we are not connected in the area, access to good contractors (in case they are needed) and to good market intelligence are a couple of concerns that we have about the investment. I am wondering if anyone in the community has any advice on the following:

1) how to find and work with good and reliable contractors out-of-state.

2) how to get a good understanding of the local market. Which market intelligence platform do you think is best for someone that is out-of-state?

3) Do you think investing out-of-state is a good idea? Are there other potential concerns that you foresee arising and do you have recommendations on how to mitigate them?

Thanks and wishing a good day to everyone!

Thanks @Ronald Rohde and @Mark H. Porter, very illuminating answers.

Thanks @Joel Owens , I appreciate the info.

Thanks for your replies. It appears that given the current economic climate, properties where the owner can pass the effect of interest rates and inflation to the lessee may present less of a risk.

We are new to the BP community and very impressed by it. We would be grateful to get the opinion of the community on the impact of interest rates on RE, especially given the current economic climate.

We are currently screening potential NNN commercial properties for purchase and would like to understand the impact of an interest rate hike. With mortgage interest rates at 3%, a 5% CAP rate is decent. If interest rates rise to 5%, a buyer would probably ask for a 7% CAP for the same property. Disregarding appreciation due to time passage, the CAP rate moving from 5% to 7% is going to bring the property valuation down by ~29%, unless of course one manages to increase the NOI. However, most leases last 10-15 years and have fixed increases (typically 10% every 5 years) that do not adjust based on interest rates or inflation. If in 5-10 years we want to sell we might have to do so at a low price to be competitive. If we refinance (typical commercial loans do not last more than 10 years) we may find that we are struggling to make mortgage payments for the new loan with the increased interest rate. So it seems that the buyer bears all the risk of rising interest rates. It also seems that in this scenario, the only way one could still profit is by having bought a property that is appreciating very fast. Do you agree with the above analysis, or is there something we are missing here? Any words of wisdom or thoughts on the above would be highly appreciated.