All Forum Posts by: Mathew Pezon

Hello all, as an extension of this thread: Is Fannie Mae's 10 property limit inclusive of property held and financed in LLCs with commercial mortgages? So do commercial mortgages count toward the total 10 property maximum that Fannie Mae is looking at? Or is the 10 property mortgage limit the maximum for conforming mortgages only, and an investor could have, say, 20 commercial notes on SFRs if they want to, and still qualify to purchase a property in their own name as long as they have <10 confirming notes? For example, if an investor has 3 properties (all 1-4 unit) held in their personal name with conforming mortgages, and 20 single family properties held in LLCs with non-conforming mortgages: could the person then buy a 4th property in their personal name and qualify for conforming financing? Or will the fact that there are 23 total properties on their tax return be grounds for denying the 4th property owned/financed in their personal name? Thanks!

Mark Brogan Nick S. Jd Martin Manolo D. Jeff Amore Kurt Gardner Thanks for the help and guidance. I'm happy to report that the flip is now under contract, hopefully the project can be put behind me and the healing process can begin. That being said, "knock on wood" there's not a bump in the closing process. all in all it was a good experience. Didn't even know what I didn't know. Humbling and educational. Got some solid construction experience and project management skills. Thanks to all for the advice!

Jd Martin excellent thoughts. Thank you for sharing. Your point about not dwelling on the loss and focusing on what is in our control to change is solid. Great advice. Your perspective about the society in which we live and the opportunity to rebound despite an early failure is also great. It's easy to get focused on the details of the defeat and miss the big picture - that there's more opportunity out there in the marketplace and we can choose to go after it again (after recovering from our loss/shoring up our balance sheets). Appreciate the support during the challenging time.

Jd Martin thank you for the insight and educating me from your learnings. Sorry for the delay while I was traveling. Point #2 is well received: I really did not like the process from start to finish, but that was probably because of my previous mistake with structuring the contractor's payment terms, the source of the construction delays. The lack of progress certainly stressed me out. On the other hand, the rental business seems to be the space in which I am most successful, so future endeavors will most likely be focused in that arena. My follow up question: how did you overcome your first setback in terms of not letting your disappointment affect other areas of your life? What techniques did you utilize to reduce stress and move on from the loss to be successful the next time? For example, I noticed that I tended to be more unhappy than usual during the flipping process, I looked at the glass "half empty" for many months, etc. How did you prevent the negativity from the obstacles you faced from permeating into your other business ventures or relationships? Have you applied other techniques to support your subsequent success in real estate such as meditation, yoga, exercise routine, improved diet, etc?

Thank you for the encouragement Jeff Amore . This probably will be one of those "refocus moment which will drive me toward concentrating efforts more on my strengths. Hopefully Juan will host another happy hour soon so we can catch up!

Thanks Manolo D. Mark Brogan Thanks for the encouragement. Perhaps another flip will come up but Mark Brogan's advice seems to resonate with me: focus on my strengths and what I understand and am successful at. All your input is uplifting. Thank you all!

Manolo D. What you are asking makes sense after having gone through this process. The excuses to myself at the time for not doing more due diligence/paperwork were: I know the contractor and trust him based on his established reputation with an investment group I (still) belong to. (and will continue to belong to because the buy-and-hold deals that come up are excellent). The people he works with are trustworthy and respectable. I assumed there would be more accountability because of this connection. The reality: We didn't sign paper work, so there was no timeline clause, and there was no agreed upon total/completion renovation price or scope of work document. Be gentle with your feedback after reading this. lol. I'll always require a contract moving forward.

John Anderson Manolo D. The payment terms mistake was that I agreed to pay the contract weekly for the work that was accomplished that week. It seemed fair up front... And what a mistake it was. The challenge was that the contractor was jumping off my job to take care of other jobs, yet whatever he managed to accomplish that week was paid. There were 2 weeks of vacation in there for Christmas, an anniversary week of vacation, etc. The result was little incentive to complete my job. That's why I still own the property even though it was purchased in October

Mark Brogan thanks for the encouragement and support. One thing I detest more than anything is quitting because of one setback. Not going to happen. Sounds like you've bounced back as well and share this mentality. So question: If I focus on my moderately successful rental business and do not do another flip, does that make me a quitter? Should I do another flip to prove to myself and the universe that I can do it and nothing will stop me... Or would I be simply dissipating my limited time/resources/energy by doing another flip, and my investing would be better off focused on my strengths of being a landlord?

Nick S. Thank you for the thoughtful response and the encouragement. Yes, it's humbling to admit the failure to myself and in public. But your insight is helping me to grow stronger too so thank you for that. Sorry to hear about your first two losses (the theft case sounds like a nightmare). Great point about your learnings and the increased toughness as a result. It sounds like you really bounced back and have put the experience into perspective. If I could ask: have you been focusing more on flips since the first two to make up for your losses/no quit attitude, or have you re-focused and ventured more into buy-and-holds? Only asking because I tried the flip as an experiment to learn contracting but also have a (somewhat) successful rental business. This experience may be a "wake up call" for me that flipping is not my true strength and focusing on what I know best would be the best path forward. But on the other hand I HATE QUITTING and want to prove to myself and the FLIPPING GODS that I can do this. However the thought of focusing my energy/resources on rentals seems like a better fit and something I'd be more comfortable with. Would you bounce back and try flipping again to prove you can do it and to learn more, or would you focus your energy on rentals?