All Forum Posts by: Ryan Ball

Union Savings is one a lot of people use. We just used GE Credit Union for a multi building 45 unit deal.

I would factor in higher vacancy to be more conservative. We always use 10% as an estimate.

You can call Duke Energy and Greater Cincinnati Water and both will give you the historical billing amounts for an address. 

If it is a conforming (FNMA, FHLMC) mortgage you should expect them to ask for everything you can think of and then some. It is painful and moderately annoying but you get a low rate and a 30 year term. Just go into it knowing they will ask for a ton of documents, that may not even seem logical. But they have the money so if you want a mortgage you have to do what they ask.

Just curious, why go with a commercial loan versus a conforming loan with lower rate and 30 year term? We just got a 10 year term with 25 year amortization on a commercial loan.

@Nghi Le that LOI looks pretty similar to what we have used. You can put whatever terms you want in the LOI. The seller may not agree to them but you can put them in there. 60 days for an inspection and due diligence is probably a little long based on my experience. We have done 15 days for smaller buildings and just did 30 days for a multi building purchase. The seller is going to want you to sign off that the inspection contingency has been satisfied in advance of closing. If you already have financing taken care of, I would not put in a financing contingency as the offer is stronger without it. Or you could leave the financing contingency in the LOI and drop it during negotiations to get some other concession from the seller.

I pulled the template off the internet and modified. Really you want to just get the major items in there: property, price, earnest money, closing date, contingencies. We did not form the LLC until it was under contract.

We did 1% of the purchase price for earnest money. 

On the LOI question, we just used an LOI to put our offer in writing for the seller's rep to present to the seller. We were not using an agent so it seemed like the easiest way to start the negotiating process. Once we reached the terms I had our attorney draft a contract. You could definitely just have a contract drafted and submit that for your offer and agree you would want to use an attorney in that state.

I think property managers are like other service providers (real estate agents, contractors, etc) in that it is much easier to find a bad one versus a good one. But if you can find a good one, they can really help move your investing forward.

I would submit a letter of intent so you can come to an agreement on price and terms before you get an attorney involved and set up an LLC. The LOI does not lock you into anything. Setting up an LLC is a 10-15 minute task so I would focus on getting an agreement with the seller first.