All Forum Posts by: Ryan Sajdera

@Alexander Churchill

I have had similar thoughts about mine but consider this-

1. Asset protection. You get sued for something totally unrelated to the property. Attorneys see you have 100% equity in a property so they go after it. If you only have 25% in the deal, all they can go after is 25%

2. Paying off your property could throw you into a higher tax bracket because you lose the ability to write off mortgage interest. (Depends on your own situation)

3. Debt is an accelerator. If you use the money to buy more properties, not only can you scale quicker, but you see the compounding effects of appreciation and rent increases.

4. Be careful putting all your eggs in one basket. Having one or two houses paid off is like having a small herd of cows on a farm. If you have 4 cows and one gets sick, your farm is in trouble. But if you have 30 and one gets sick, it’s not going to tank your farm.

Just some thoughts that changed my mind about paying off properties. Hope that helps! Sounds like you’re doing well so far!

Can anyone shed some light onto the topic of credits when financing a commercial deal? I’m guessing this is similar to a concession on the residential side but I can’t find any info on it. I met a guy who said he used a deferred maintenance credit to help offset his down payment.

Example: the buyer and seller negotiate a $900,000 property down to $800,000. The buyer finances the property for $900,000 and the seller gives him back $100,000 as a “deferred maintenance credit” which he uses to offset his down payment. Do banks allow this? Does anyone use anything similar to negotiate financing? Thanks!

Sounds like you are already well on your way! That’s awesome, congrats!  Yes prices are going too high too fast here and in my opinion, that bubble is going to pop. You can already see some of these 250k houses selling for far less or becoming stale listings. Some people just get greedy i guess. This is not the west coast and houses are not going to sky rocket in appreciation... Let’s be real.  Slow and steady here with cash flow as the name of the game :) feel free to pm me if you wanna chat ever. This thing doesn’t notify me when people reply to comments on here so I’m sorry for the late reply.

Ryan

I don't think that sounds like a bad strategy. I would work to pay them back as fast as possible. The only thing I wonder about is how to refinance with more than five existing 30 year notes. I've heard that banks don't like to give you 30 year notes if you already have 5 or more existing notes. 8% COC return isn't bad for most people who want conservative and less volatile investments.

Hi Scott! I am currently investing in Manhattan and things are going fine. You don't have to worry as much about the summer trying to keep tenants in because they typically all sign a 1 year lease with the property. All of mine do at least and I rent to mostly college students. How is the Salina market? I haven't ventured too far west, but I hear its growing!

Ryan

@Kyle Doney  how do you dispute these things?

Hey BP,

I have a tax question in regards to my current tax rates. I just got notified that my taxes are going up and so is my insurance premium. Its going to take my mortgage up about 50/mo and i am currently short about 800 dollars for my new estimated escrow balance! What gives? Do i have to think about rent increases?

Ryan

Yes, looking over the laws for KS, it just mentions some items that fall under ordinary wear and tear and excessive damage and filth. There are huge streaks on all the walls from shoes, beer stains, etc. Theres holes in the wall where recliners and chairs smash into them frequently, so i'm pretty safe to say this is NOT normal wear and tear. They even agreed that they were rough on the walls... but thats a college rental.  So i guess, i'm just looking for input on how others manage this type of issue? 

Ryan

Hey BP, 

I was wondering what I can use a security deposit for, in terms of repairs. I currently have a house that is going to need ALL of the rooms repainted upon move out. The question is, can i use the security deposit to pay for the paint, and supplies? Do I charge for my time if i'm not a licensed painter? Can I use the money to purchase a sprayer for the paint? How do I go about doing this all? Thanks!

Ryan

@Andrew Johnson @Penny Clark @Deanna McCormick   

So if i have 6 applicants, do you require a background check on all 6, plus their parents totaling 12 background checks? 

Thanks!

Ryan