All Forum Posts by: Rick Ortiz

@Anthony Gayden

Agreed. Tried to do the same but Corona came in the middle of me selling so im taking off market and will refinance instead (since it was paid off). So i will only get 75% LTV but prob wouldnt do much better selling between low ball offers and closing cost in a post corona era. Take the cash and try to reinvest hopefully its a buyers market by then

Well I guess there levels / definitions of being a scam.  But I guess in general you want to compare quotes from different people.  Each lender is looking to make money off of you.  Thats fine since you are making money as well.  HOWEVER you dont want them making too much money off of you.  Interest rates on short term loans are obviously much higher than traditional conventional loans.  But they shouldnt be loan shark rates.  Just shop around and compare rates.  Makes sure that the terms of the loan are clearly defined. Read the fine print. If you can stay away from them and use other funding than start with that.  Its just that there rates are so high and ultimately thats the scam.

Well assuming you are past the LLC creation point which is straight forward assuming you and partners can agree on decision making hierarchy, operating agreement, etc.. the next most challenging thing from an operations stand point is getting financing terms that you are comfortable with. Its not a a huge deal but if you are unfamiliar (like I was at one point) when you go to finance through an LLC the rates are higher. And also if you are doing buy and hold versus fix and flip, finding lenders who want to hold a long term note with an LLC is not as easy as your normal conventional lenders. All else being equal the LLC is not the hard part. Finding deals, making money, on a consistent basis is a bigger difficulty. Best of luck.

@Juan V Lopez

I was in the exact same boat with Temple Veiw Capital. My project was smaller $75k rehab but similiar story nonetheless. Just submitted my scope of work etc..

I opted to not proceed for a few reasons. One was (like you) paid cash and i have no mortgage on property so no need to rush. Second was how do I know there funding wouldnt dry up half way through a project and then im screwed with a half done project and god knows what legal issues. And due to virus and economy i have no idea what apprsisal im getting 6 months from now. And now without using their money i can use less expensive albeit unlicenced contractor for some work, and stick with licensed electrician and plumbers only when necessary for major work. Thus im saving money and i dont have some hard money lender up my *** while the economy goes to ****. Downside is now im using my own cash and need to pace myself accordingly.

@Justin Bautista

My rule is 39 holes and under they can keep there deposit.

@Marcus Johnson

I think your point on debt is correct however rental properties are good debt. This is such an extreme that there in no one who could predict it, not even Dave Ramsey.

You seem to have done well if your lake house has good equity so there is no issue. There is no reason to lose sleep at night if you have equity in your properties and have some reserves.

Debt is fine as long as debt service doesnt rise faster than income. Income shouldnt rise faster than productivity, cause thats not sustaunable. So if debt finances increased productivity than your good. Buying cash is a novel idea buf it slows productivity since it simply takes too long to scale.

All in all we are living a dooms day scenario and an extreme which no one could predict. Best of luck

@Jay Hinrichs

Agreed all the way around. I dont see immediate impact but def a change in market dynamics. Some people will just be apprehensive about purchasing. Others who are long time land lords may just want out since they are tired of dealing with the BS of lanlording and this Pandemic just was final straw. And just psychology of such a traumatic experience will slow the market. All thing mixed in motivated sellers, hesitant buyers and uncertain economic enviornment should help for buyers market. Not a complete free for all but def some price erosion.

@Andrey Y.

Dumbest thing i heard in a while. Can you have both? Yes! But casflow will not fluctuate as much. Appreciation will. So you cant act like you have cracked some code that no one has figured out. Its a matter of a balanced portfolio. Some properties cash flow more than others some appreciate more.

If your so intetested in having a big mortgage i would love to sell you one of my properties in philadelphia. You can have my $500k mortgage. I will take the cash right about now and buy a similiar property in 6 months when prices come down AND have enough left over to buy another cash flowing property 15 min away from that one in NJ. This way we are both winners in your book.

@Mindy Jensen

You need to include vacancy as well since reserves are meant for that too. With that said there is no hard and fast rule. I woukd think you would need at least 2 months rent for each unit. This DOES NOT mean you need to have that siiting in your bank. Just means you have access to it or can fund easily.

If you have multple cash flowing units assumption is you can use your scale to offset missed rents, etc.. and your reserves could be lower.

I never thought about extreme circumstances like pandemic and times where almost everyone is affected. So reserves were based on pre Corona. Obv things changed

@Collin H.

Your absolutely correct. Its the cost of doing business. But of course people will ask for a refund for CV related stuff. Why not ask.

Your business, so your choice on how to handle cancellations. But its a no brainer that someone who saved up all year for vacay will at least try to get a redund.