All Forum Posts by: Scott S.

That's good advice Bill. Thank you again!

Wow thanks Bill! That was a very detailed explanation. Sounds like it's not cut and dry. The 10 year buyout on commercial loans scares me a little. I was hoping to find away around that.

Hi everyone. I've tried to search a similar topic, but I couldn't find anything quite the same. This is a hypothetical question, but here goes!

A property I'm interested in buying is zoned commercial; downstairs is 1800 sq ft (company occupied) and upstairs is 1800 sq ft (consists of two 900 sq ft apartments). I spoke with my mortgage banker yesterday and asked about getting a residential mortgage for this mixed-use property. She said I can if the commercial square footage is 25% or less (she said that's a typical rule). Because the sq footage is 50% I would need a commercial loan.

SO, lets say I get a commercial loan secured and over the next 10 years, I convert half of the lower level sq footage to a residential apartment. Do you think it's possible to then refinance the property with a residential loan??? The commercial portion of the property would only be 25%. That would open me up to more options and I would then have a much easier time trying to sell the property if residential financing be can be obtained.

I'm a newbie so any help would be apreciated. Thanks!

Tevis, thanks for being devil's advocate with this. You're absolutely right, I still have a lot of information to gather. I haven't even seen the place yet; that will happen this week. I'm calculating the cash roi on this deal to be around 29% and the total roi about 31%. That's a hell of a lot better than anything else I'm seeing in my area. I'm not sure if $135k is good but it certainly cash flows well.

The commercial tenant definitely scares me a little and I want to find out more about the company. I apologize if I'm putting the cart before the horse regarding financing questions, but if I'm having trouble obtaining financing due to its commercial zoning, I don't even know if I should consider the property. Hence, me getting advice from you guys beforehand.

It's tough trying to run the spreadsheet, but lacking some key variables, ie. rates, terms, cash down, etc... on commercial loans.

Thanks guys! I'm starting to stress a little bit about the owner financing. I think I'd much rather lock in conventional financing while the rates are low. However, this would most likely be a commercial loan because it's a mixed use property. What are you guys seeing for commercial rates right now and what percent down do they typically want?? My credit score is over 800 so I am very credit worthy. I can probably do 25% down, but not much more than that. Thanks again!

Thanks Karen! I'm glad to hear your thoughts. This is a little over my target budget, but I can swing it and I think it's a good investment with solid cash flow potential.

Thanks Bill. I appreciate your advice. I'm not too familiar wi seller financing, but I've read some of your posts. He wants $25k down, which I can do. Can I ask your advice on how I would structure the arrangement? Let's say we agree on $125k as a price. Is it possible to do a conventional refinance on a commercial property after say 5 years or so?

Hey guys. I was wondering if I can get your advice on a possible deal. I was speaking to one of my customers today (I sell cars) and I mentioned that I'm Interested in buying a rental property (like a multi family home). He said, "I've got one for you!" He's thinking about selling a 4,000 sq ft house (in an area that I've been looking), but it's zoned commercial. He's getting a little older and is getting sick of being a landlord. The first level is roughly 2,000 sq ft with a business renting it and the second floor has 2 apartments that are each about 900 sq ft with 2 bedrooms each. 3 furnaces, 3 kitchens, new roof and vinyl siding.

My question is this, should I be worried about the fact that its zoned commercial?? What should I be thinking about with this property? Any tax implications or anything? All 3 units are occupied and he's bringing in about 1,800 per month (which is definitely a little lower than what he could get). He wants $135,000 for the property and he's willing to offer seller financing.

I'm hoping some of you can chime in and let me know what you think. Thanks!

Scott

Great to hear from some Buffalonians on here! John, I'd definitely be interested in joining your group. Let me know more about it if you could.

Jim, you're right about the Elmwood Allentown area. Just not sure if I have the time or experience to tackle all of the maintenance and juggling of 2 renters. I was thinking a condo might be a decent starter investment.

David, would you recommend I start out with an MF in our area?

Hi everyone,

I posted something similar to this yesterday, but I figured I should do it the proper way in the new member section. First, I'd like to say how incredible this site is. I can't believe how much I've learned in the past few weeks just cruising through the forums. Thank you Josh and everyone who contributes!

I'm 33 and my wife and I just had our first child. Working in sales with no pension, the thought of paying for my daughter's education seems overwhelming. I feel like I will never retire. I had this thought of buying an investment property for mostly a buy/hold strategy (a little cash flow would be great obviously).

I started looking into condos due to the fact that the hoa takes care of exterior maintenance. I know most of you don't agree with condo rentals, but let me know what you think of this.

The condo I would purchase is a 2br, 1 ba, 1100 sq ft, roughly $70k in a nice suburban neighborhood. The condo will cash flow about $2500 per year including PITI, vacancy, and maintenance. I plan to self manage as it shouldn't be too much work.

Are condos a trap? I notice a lot of newbies like myself seem to be interested in condo rentals (maybe because they're cheap and you don't need a lot of cash to put down the 20%). Let me know what you guys think.

Thanks!