All Forum Posts by: Simon Hernandez

 That's definitely an option. Logistically it's a little difficult since I am the one responsible for taking the kids to school, etc. Not to mention taking time off from my job. I will if I have to, though. Duplex was occupied by one non-paying tenant living there whole time and one kind of paying tenant for 6 months. Only squatters since then.

The "paying" tenant stopped paying after the duplex became mine. Eventually agreed to pay 3 out of 6 months rent before they moved out. Income definitely balanced out to less than zero due to PM fees, etc. Covid moratorium factored in to maybe the first 6 months. After that it was lead compliance. Although it was ultimately my screw up for not picking it up, my local RE agent did not inform me of any of the lead compliance issues and their implications. Then they sat on it for a good 9 months without doing the lead remediation and not contacting me. This is when I switched PMs. They came recommended by 2 smaller scale investors. They took control, slowly handled the lead remediation, formally evicted non-paying tenant, did an inspection and gave me a renovation price of $13k which I payed. Allowed squatters to move in at some point. Took a while to evict them. Once again PM never contacted me. I always had to contact them. After 1.5 years dealing with them they cannot provide evidence of any of the renovation being done and are still radio silent. Best case scenario I get my $13k back (which they were amenable to but have since gone silent), find a new PM and get the reno done. 

Hi all, I've got a long, drawn out situation in Cleveland (I'm OOS) that I could use some help with. I purchased a duplex in the Little Arabia neighborhood over 2 years go through a well known company. For convenience I decided to use their PM services. It was occupied upon purchase and one of the tenants was not paying. Fast forward over a year later and nothing was accomplished except me paying monthly PM fees without any income on the property. So, I parted ways and signed up with a new PM group. They started out great and I payed over $13k for renovations (in-house contractor) per their estimates. Fast forward another 1.5 years and the duplex still remains unoccupied and there is no evidence of them ever completing any of the $13k in renovations (They've had the money for over a year). So, my problems are twofold. A) I need a new PM to take over that can do what they say they will do - with access to contractors that will perform. B) Figure out the best way to approach the missing $13k before the transition. They are basically dragging their feet at this point, not in contact hoping I'll give them another year to show something for the money. So far they've been unable to provide proof that any of the work was done despite my repeated requests. Can anyone point me in the right direction? I'm not naming names in public at this time. Thanks everyone! 

Hello, all. I'm curious as to what everyone is using for a couple of the parameters when analyzing deals in Cleveland B and C class. Specifically PV growth, income growth and expense growth. In trying to keep it simple and conservative, I've been using 1% across the board. Obviously no one can see the future but you've got to plug in some number, right? What do y'all think?

So to you all who are still buying, but with a wary eye on the future market, how far down do you go in stress testing your underwriting? Do you run the numbers at 50% of current market rent, 40%? What’s your worst case scenario?

Thanks for the breakdown @Matty Foley. Sounds like I have some more loan shopping to do. The original property I was looking at fell through so I'm starting from square one. 

Thanks @Matt H. and @Erik Hatch. Would my being a first time commercial borrower affect the terms/rate if the numbers work look good on the deal?

May not help me out on this one but certainly could help my next deal. Thanks! 

 Excellent!! Yield maintenance and defeasance are two new terms for me. Thanks for the education!

 Thanks for your input, Syed. I guess my thought was that there's pretty much only one way for rates to go from here (not counting negative rates) so why not lock it in for 30 years (not with an unreasonably high rate, of course). Could you not refi out of a 30 year fixed every 5-10 years just the same?