All Forum Posts by: Sean Williams

I am not sure its fair to generalize "banks are tight"...they may be a little more risk adverse given the current environment, but they have not totally shut down or have they closed their wallets. The reality is the aggressive ones that have an appetite are still lending money as they normally have in the past...in fact we are refinancing a commercial property as we speak. Why wouldn't you want someone to take advantage of a deal if the numbers work for them and a commercial lender will lend at 4% interest rate or less??

@Mike Anderson typically I would recommend a line of credit or a refinance over selling the property since in most cases I usually regretted selling a property as a true buy/hold investor. Plus interest rates are so crazy low right now, its nearly free money you can take advantage of while keeping your current property. Keep in mind that selling a property includes commissions and tax transfer fees that eat into your equity too. 

I think one thing investors miss alot is ROE (return on equity), instead they focus on just ROI. By looking at the current CF you are receiving vs. the current equity you have in the property, you may realize that by moving it to another property you can increase your returns substantially.

Side note:
We recently did a 1031 into a property located in an "opportunity zone"...meaning that tax burden that would hit us one day will potentially evaporate after we hold the property for a certain period of time. Something else to think about as you evaluate other potentially opportunities if you go the 1031 route.

@Cliff H. thank you for sharing, there is some great infomation on that thread and spreadsheet...very helpful! @Alice Collins we have not yet decided on a system yet, still in the research stage. Will keep you posted on what we finally decide.

@Sid Payne and @Garry C. are you all still happy with OwnerRez? I don't see anything about it integrating directly with Airbnb on their site.

Hey @Andrew Melvil, would love to see how myself and my team could help. We are invested in a few of those areas, specifically the Highlands and near UofL. But I am also a native to the city and know the others very well. Feel free to call or email to discuss how I can best assist. Thanks!

@Bryan Springhetti try Heath Majors at Liberty Financial, they have been pretty good to us with favorable terms. I know they are backlogged with loans but can't hurt to check!

Investment Info:

Large multi-family (5+ units) buy & hold investment in Louisville.

Purchase price: $1,250,000

Working on "BRRRing" a 15 unit commercial/apartment complex in one of the most popular areas of town, but also the hardest to find a good deal. Our hope is to renovate, rent and refinance with $0 out of our pocket. Once complete we'll have over $1.8M invest with a projected value of $2.4M+ that will include 8 short-term rental units, 4 long-term rental units and 3 commercial storefronts.

What made you interested in investing in this type of deal?

Prime location, upside potential, largest challenge we have taken on to date, opportunity to grow our team and brand.

How did you find this deal and how did you negotiate it?

Our electrical contractor was doing work for the owner and caught wind they were considering selling after owning for over 40 years. 3 days later of catching wind, we had an accepted contract.

How did you finance this deal?

Construction Loan with local credit union.

How did you add value to the deal?

In progress...

Did you work with any real estate professionals (agents, lenders, etc.) that you'd recommend to others?

I represented the buying entity to purchase the property (Williams Team at Remax Premier Properties), financed by Liberty Financial, contract management by Miranda Construction, designed in tandem with Laura Philpot.

@Bernadeau C. I would check the deed first and foremost, that will tell you how it was originally purchased and how it is currently owned: one or two parcels, and fee simple or condominium style of ownership (keep in mind condo is a form of ownership, not style of building; whereas "townhouse" is just a style of building). From there, if its truly a duplex (2 units on 1 parcel) then you should be able to get regular conventional financing. If it is 2 separate parcels like you think then you'll likely need to go one of two routes:

(1) get a commercial lender to package them together into one deal - this is easy for them to do. When I say "commercial" I simply mean a lender either doing a portfolio loan they will keep in house, or something they don't have to sell to Fannie/Freddie Mac. Local banks are best, I just did one with 3 single family homes on one mortgage...keep in mind if you have to sell one of the properties it could get a little tricky if they won't allow a partial lien release.

(2) do an addendum to the contract separating the two parcels into 2 real estate transactions and then purchase them congruently with whatever regular financing you were planning on. Keep in mind, this would likely be a conventional, 25% down Fannie/Freddie Mac (gov't backed) loans. Commercial loans usually only require 15-20% in most cases depending on the bank or credit union. Also in this scenario, you theoretically risk closing on one property and having the other deal fall apart (say to appraisal or title issues), so I would want my attorney ensure that both deals are tied together contractually if I went that direction.

Probably a wise idea to consult with a title/closing attorney, if you go ahead and pull title this should shed light on things and direct you towards the correct coarse of action.

We are in the process of refinancing some of our rentals here in Louisville, KY due to the attractive interest rates in order to increase cash flow and pull out some funds to have available on sidelines in case some deals start popping up down the road. That way we can take advantage of things like some savvy folks did in 2008-2011. Not that I think we are necessarily headed for a recession, but sometimes perception is reality, especially with the way the media can portray things.

Makes sense when you consider UPS World Hub for receiving parts for assembly..ie Ford plant and Toyota in Georgetown. Plus we could use some self-driving cars when you consider the amount of bourbon consumed here 😄