All Forum Posts by: Pete Sailhamer

Thank you everybody.  I'm glad to know that I'm not the only one who is divided on this issue.  My likely course will be to allow smoking outside the building, but not inside.  The only issue I have with this is that the lady I was referring to is not very mobile, so even that will be a tough one for her, especially in the freezing Wisconsin winters.  So it's still not an easy decision.  

They are all on month to months, so the new leases will be effective 30 days after purchase.  I like the idea of keeping her month to month and seeing how it goes.  Thanks again!

I am closing on an 8-unit shortly and have been debating back and forth on this one.  I have a no smoking rule in our lease that I use for all our rentals.  However a couple of the current tenants smoke as it has been allowed by the prior owner.  For the sake of health, sanitation, the well-being of other tenants, and risk of fire I have never allowed smoking.  However, I do actually care for the tenants that rent to me and don't want to displace them simply because I showed up.  One is an elderly lady who has lived there for 23 years.  I also know that by these tenants leaving, I have the opportunity to rehab those units and increase the value of the property.

Any advice on whether I should let them continue to smoke, or enact a no smoking rule once they sign my lease in 30 days?

@Dion DePaoli Thanks Dion, that makes sense.  I appreciate the response.

Hey everybody. I am looking into purchasing another multifamily and wanted to ask the seller to carryback 10% of the loan to help with the down payment. But when I checked with my lender, they only will lend with a combined 80% LTV, including the seller financing portion.

Advice from a colleague was to set up my own financing on the back end of the closing, meaning I would close using my own money, but then have the seller (or private investor) lend their funds and take a second mortgage post-closing.  I don't want to do anything illegal, as well as I don't want to hide anything from my lender.  I have a great portfolio lender than I want to keep solid relations with for years to come, so I don't want to jeopardize that.  Would this strategy likely be frowned upon by my lender, or is this a normal technique?  I wanted to hear from the BP community before seeing if I should pitch it to the lender.    Thanks!

I'm looking at a property in New Holstein, WI and checking to see if anyone else knows much about the area.  I'm from about an hour away, closer to Madison.  The town is on the smaller side, a little over 3,000.  Thanks!

Thanks Brian for great content. I'm beginning the upgrade to larger multifamilies in the Madison, WI area. It is definitely the way to go forward.

Yes, everything is purchased through an LLC. Thanks for the tip Steve.

Thanks for both of your responses.  I really appreciate it, and reading your bios I can see you both have a wealth of experience and knowledge.

@Bill Gulley My follow up question to you: Does your answer change if the property is bought at a discount (i.e. 80% of value) or if there is definite potential to add value decreasing the total LTV around the standard 80%? For example in the 3 properties that I have bought so far, each was purchased between 70-80% of the value with cash, and then I immediately did a cash-out refi (like you mentioned Chris), while the lender still had a 80% LTV with no money down on my part.

The reason for the brainstorm is that I'm guessing at some point banks won't want to lend to me after a certain dollar amount, so I'm researching additional ways to still finance a deal while giving lenders (and me) peace of mind.  

Thanks again for your wisdom, I really appreciate it!

I've been investing in 1-4 unit investment buildings (buy and hold) and recently have begun to look into apartment complexes.  After reading a lot about creative ways to fund the down payment by partnering with private investors, a strategy that wasn't ever mentioned is as follows:

Fund the deal with a bank and provide the 20% down payment out of my own funds.  After one year, or long enough to show future investors that the numbers DO actually perform, open the opportunity up for investors as a second mortgage (in the amount of the 20%) and provide them a fixed return (8-10%), after of course running the numbers to ensure it still cash flows with this second mortgage.  

The benefits are: 1) Less risky investment for investors because they can see the numbers performing in real time.  2) More confidence for me in not losing someone else's money (i.e. test it with my own first)  3)  I as the investor get my money back and can move on to the next deal.

Is this logical, has anyone done this before?  What considerations are there for doing this?  Would the bank care at all, as long as they are still getting their mortgage payment every week?  Would this simply be a Promissory Note that a local Real Estate attorney could draft?

Thanks for any feedback!

Thanks Brett.  Busy, but having fun!