All Forum Posts by: Sean Ridlon

@Remington Lyman alright, if you'd like to send them to me that be great.

Hi, guys and gals. I've looked at this topic on a few searches of the forums but thought I'd ask my own question. My partner and I have two duplexes, a three plex, and two single family rental homes in the state of Ohio. We bought them all for cash; we currently 80% occupied and generating plenty of cash with no debt and very low operating costs.

We'd like to obtain a LOC for our business, a portfolio loan, etc in order to keep bringing new properties into the portfolio.

What we are running into is that most of the portfolio is potentially under 75k per unit, but what caught me by surprise is the number of lenders who liked us either for a business LOC or portfolio loan but had residency requirements (of course we have local managers of all of these). I didn't know I needed to move to Ohio to borrow money there! (not that I'd be against it, I love Ohio but my wife's family is here in Florida) 

If anyone has any experiences with Ohio residency requirements I'd like to hear about that, too. Obviously I already pay Ohio income taxes. 

Ok, boomer.

I have one. It isn't doing bad. I paid all cash for it (which wasn't the best idea I ever had considering how hard it is to come by cash). However, in just three years the value of the trailer is 100% paid back and I still own the land (5 acres worth about 5k an acre when I bought it). If a tenant pays the rent for six years, I'll have 100% of my initial investment back. After property management I'm making $765 a month renting it out. 

So one thing I'd keep in mind is that we have to shorten up our timelines when we deal with trailers. I look at it like 3-6 years and I don't care what happens to it after that because it's all gravy then.

If you can get them with land, at least you'll always have the land and can put a newer trailer on it if you have to.

I applied for a conventional loan as a self-employed since 2018. The bank was willing to consider the leases on my rentals as income but not my 2018 and 11 months of 2019 business income lol. Welcome to the gray zone.

@Scott Mac one of the crazy little quirks is this place has no insulation in the walls or floor at all lol. But thanks for weighing in, I do appreciate it.

My family and I were asked to if we'd like to move in to a old country house on 3 acres owned by my wife's extended family.
My wife and I own two cash flowing rentals, as do my brother and I. Of course we'd like to keep adding to the portfolio.

So we moved in to it.

Here's the situation:

1) I tried to buy it from them outright and they declined to sell it. No option to turn this into a rental or to flip.

2) We live here for free, but pay the minimal county taxes, electricity, and garbage.

3) There's a lot that needs work, or is frankly unfixable. It needs a roof, plumbing is old but works, electrical is old but works, etc. There's no heat or A/C except window units.

My options are to keep fixing stuff here (so far I've spent 4k on top of the taxes, electricity, and garbage) or to just buy something somewhere else to fix up and turn into another rental. My wife has been working for a year after a 17 year hiatus to raise our children, and I am in my second year of self-employment so our financing options are kind of limited. I do have a good nest egg saved up.

In this situation, would you stay at the basically free house knowing it was going to need periodic work to it which was never going to pay you back or would you go on to the next deal?

CAP rate seems pretty weak being under 8%, but that's a personal preference not a universal rule.

I don’t know where the building is but it looks old and the area looks pretty shaggy but I can’t tell from that what buildings in that area are selling for. Do you have comps? It’s still going to need to appraise for something close to what you’re trying to buy it for.

If it’s in tip top shape (like new) in all the major expense items like roof, HVAC, etc and all it might be a score.

Also rental history would be good to verify. Make sure it actually is producing those numbers for you.

That’s all I got.

Are you planning on using her money or something?

My advice is don’t trip. Satisfy your own questions and research in the markets and asset types your are interested in. You’re either in or you’re out.