All Forum Posts by: Sandeep Shukla

Hi Sandeep, congratulations on the purchase! 9 units can be that tricky number where its harder to manage from a distance. I think about the obvious things like vacancy and maintenance. 

I know you said they're occupied currently but should that change the 16 hour round trip to show your unit is going to be killer. 

Maintenance is a little easier you could always call out a vendor, or partner with a handyman. But not having someone there with the properties interests in mind to verify the work being done is quality would personally make me uneasy.

I would definitely look at a local PM for the long term and then after the first year and hopefully the first round of renewals you can make a more educated decision as to whether or not to keep them around.

No matter what you decide to do, congratulations on the investment! 

There is a distinct advantage of having local management, though with technology it's possible to manage from a distance yourself. You will need resources in place to service the property, especially for tasks that need immediate attention. 

Whether you should rent vacation rental (short term) or long term depends on your goals. "Short term" is higher maintenance, of course, and requires "boots on the ground" on a routine basis. Long term, not as much. 

But if you decide to self-manage, you need to consider (at least):

-management software (rent management, communications, maintenance requests and tracking, etc.)
-reliable "handyman" who can deal with minor repairs (make sure licensed and insured)
-tenant self-inspection app or use third party service for inspections
-vendors to service home functions, e.g. plumbing, electrical, HVAC, etc.
-landlord attorney for legal questions, lease agreement, landlord forms, etc. 

Best wishes!

 Would you mind sharing to help everyone here?

Hey Andy! I could talk for hours about this. Happy to answer any questions you have to find one that does it all as I know one! Feel free to DM me if you want to schedule a chat.

I would not even consider option 2. Why? Because the more money you have in the deal the higher your risk. Cash payment is the only way forward if the property does not qualify for a loan until it is stabilized, your situation is different. Since your property apparently qualifies for a loan I would take it - but shop around with different lenders and try to negotiate any prepayment penalty out of the contract. 

I had good experiences with credit unions and community banks as well. 

In the meantime, you can use your cash for another down payment....

@Sandeep K Shukla Personally I prefer longer mortgages than 7 years. My past 2 deals have both come with a prepayment penalty so make sure you check on that.

Last year I paid cash for an 8 unit value add that initially wouldn’t qualify for financing. It took about 9 months to stabilize it and then I cash out refinanced it.

If you have enough cash I’d pay cash initially due to the auction deadline. Then shop around for a good mortgage.

I’m using Brandon Turners new lending platform for my latest deal betterliferef they have cash out options and go up to 10 units.

 What's the prepayment penalty on option 1? A lot of the apartment loans I do have none, so if that's the case, proceed with option 1 and refinance whenever it suits you. I don't have enough details to opine on the rate/terms being good/bad, but it's not vastly outside the ballpark.

For option 2, why are you assuming you'd have to wait 6-9 months? The "seasoning" thing is for home loans, this isn't a house. :)