All Forum Posts by: Phil Ferranto

Hi Tim, congrats on taking action and working out this temporary hurdle. As far as I know, mortgage banks other than private lenders are required to have the property season 6 months before an appraisal is worth anything, otherwise rely upon purchase price. I bought a home at auction in October '15 for 19K, had 17K or rehab, and am now going through appraisal process with Royal United. They'll lend at 75% of appraised value (est. 60-80K) and we're looking to close in a couple of weeks @ 5%/30 year fixed. If you have more experience like Brent with a lender (local banks/credit unions seems to be best) you have worked with before, they may give you the benefit of the doubt and lend at appraised value 3 months after acquisition, especially if part of a portfolio loan package. Best of luck!

Hi @Sean Richway, sorry for the lag in reply! I'd be interested in exploring if this can work out. I'm under contract for a primary residence in San Diego and will be moving there in January, it'd be great to meet up next month. I'll pm to connect further.

Hello BP community,

I'm a buy and hold investor that acquires strong cash-flowing properties in solid neighborhoods in SE Michigan. I'm looking to increase the portfolio and am looking for an arrangement where I would partner with a private lender who would offer financing of 80% of purchase price at 7-9% inclusive of any closing costs, points, etc. Payment would be interest only until refi event 6-12 months later, upon where money at work would roll into next acquisition of properties. Lender would have first lien position on all properties until refinancing event. I'd be looking for 250K to deploy in March 2016 at an 80% LTV. I'd love the opportunity to discuss and happy holidays.

Ron,

sounds like you are doing well out in Birmingham. I like your strategy. Thanks for the info. I'm thinking to push for a loan in range of 67% LTV (including rehab costs) and ideally I'd be able to get 7 year fixed, but it sounds like if I could get your type of terms that would be fine. I'd rather give up leverage on this first deal to prove to banks that our incentives are aligned and our money is where our mouths are. I've started to reach out to the local banks but am in the early innings on getting that work item completed. Sounds like there would be buffer in the reserves budget, which probably means in reality it's about what it would cost.

Overpay is a concern. I don't think we'd pull the trigger unless the numbers were massively in our favor on paper. I'm not expecting Fannie/HUD/non-recourse this first go round; but when I'm ready for that I'd love to chat further.

Hi everybody, I'm shopping for a 30-50 unit MF apartment building and am trying to work some calculations for reserves and rehab costs. I have an ever growing list of data points that suggest investing at least $5,000/unit in rehab costs is a great way to drive value and force appreciation that would more than pay for itself within 12-24 months. This assumes you're taking over a C property and can gain an extra $50/month in rent. 

Using these assumptions, my questions are: 

• Can the $5K/unit count as our rehab and reserve budget? Can I just roll them all into one?
• If property is valued at $1MM and we want to budget $200K in reserves, would it be realistic to secure an $800K mortgage with 5-10 yr. fixed/25-30yr. amort/1st yr interest only for a first time sydicate?
• Has anybody invested more than $5K/unit in upgrades in C property and not been able to force appreciation to realize decent ROI?

Another general question is have any MF apartment investors used an advisory firm and seen the value in that for securing financing? What terms do they currently look for?

I'm looking for some feedback from people who have used CREFCOA for financing their multi-unit purchases. Are they the right group to work with? How do their fees compare on Fannie Mae multi-family loan programs? At this point I'm not fully understanding the relationship between Fannie Mae and CREFCOA; and how to assess the cost of CREFCOA's services.

Many thanks!

 Well Tyson, the good thing for us is a new wholesaler is born every day. I'll keep looking and learning, hopefully soon we can put some points on the board.

Hi Julian,

I have had a similar analysis- I know conventional wisdom says to buy your own home, to me it just doesn't seem like the best way to leverage your cash as it seems there are better income generating activities out there. On the other hand, if you are able to buy a duplex then take out a home equity line of credit that you can then put to work in your out of state markets, you might be able to have more options on the table, including having a tenant pay for a portion of your mortgage.

I'm not as familiar as participating in paper investments or providing bridge financing, I'm also interested in learning about what those returns look like.

Best of luck with whatever you choose!

Hi everybody,

I like to see how macro trends affect investment opportunities. With an overall jittery stock market and energy prices at historic lows and continuing to fall further; how do you see that ultimately affecting real estate markets? Could there be consolidation in oil exploration industry or natural gas industry that will make certain real estate markets soft? Is this just a temporary blip that doesn't have a real impact on markets? I understand that every real estate market is separate unto itself, but how do larger macroeconomic factors present hidden opportunities (or build dangerous bubbles hidden to the average investor)?

Hi all, thanks for the warm welcome to the site. Yes, I agree the places I'm looking to focus look random at first site- basically I'm from Michigan, have a business interest in southern California, and technically call Portland my home- although you can probably consider me more of a nomad- my primary business keeps me out of country about half the year. My friend and prospective partner has been having some very good initial success in Detroit area- more like Macomb/Taylor area.

For all of you active in the greater Portland area, I'm quite interested to learn about your experiences- it seems like you need to venture a bit outside city limits to find rentals that can cash flow- although my experience is nothing compared to yours so perhaps you find hidden value. I first became interested in looking at purchasing as a primary residence that could be converted into a rental property if needed, and wasn't finding the numbers to work. Let alone even thinking of messing with an HOA!