All Forum Posts by: Steve K.

@Davey Wilde I am looking for the same multi-family units to invest.  Looking for good PM as well.  I am also open with joint venture or partnering up with other investors.

@Mike Hartzog  If the subordination clause on the 49k loan did not exist, would you have gone through with the deal? 

Looking at the $135k collateral value.  $49k loan plus $196k loan means the property is "upside down" by about $110k (is my thinking correct?).  My newbie question is, why would a note investor want to purchase such note?

@Mitch Dowler  Could you elaborate on Tacoma licensing and inspection?  Is it similar to Seattle? Thank you.

@Dmitriy Fomichenko Yes you are correct. It's 401k, not IRA. I got the two mixed up. Thank you.

The local state agency that regulates financial institutions will be interested if there is clear "bait and switch" and other weird stuff going on.  

The documentation and rules are arbitrary because you are not dealing directly with Fannie and Freddie Mac.  There is a minimum set of Fannie/Freddie underwriting guidelines.  It would be great if every lender ask for those same documents and call it good.  Unfortunately each lender's underwriter can add additional documentation and rules he/she deem necessary for the "perceived risk".  Reason is someone just mentioned, no borrowers are identical in terms of credit profile, risk.  To be more specific, parameters such as years employed, past credit history, credit score, bankruptcy, if any 30 day 60 day 90 day late payments, judgements, subject property location,  etc.  Bottom line is, the loan packages have to be good enough for the secondary market, even though the lender may choose to keep the loan in house. 

@Nixon Vayupak  I second Jeff H.'s suggestion, have the group setup an entity locally and lend you the funds.  Get an attorney involved.  Google "AML" anti-money laundering.  Get educated from FINCEN and CFPB.  On the other hand, if it's your relatives investing with you, then there shouldn't be major problems. 

Don't know what kind of IRA setup you have. You may be able to borrow from your IRA as a "loan" to yourself. And then pay it back over less than say 5 years or 15 years. I heard someone who can borrow from their IRA at 2%, and pay it back over 5 years as a generalized loan. Just fill out the form, send it to the IRA trustee, pay a $500 fee, and then a check comes in the mail. All the principle plus interest goes back to the borrower's own IRA. Essentially a borrow from yourself, and then pay yourself interest arrangement.

The engineer is correct and giving you all the possible scenarios.  Structural engineer designs the foundation, assuming many design parameters.  One parameter is load bearing capacity of the soil directly underneath.  To design a proper long term fix, the structural engineer does need to do a geotech exploration to verify the soil composition and ground soil's load bearing capacity.  Geotech exploration involves digging with a backhoe or core drill.  And then analyze the soil layers for the final determination.  Sometimes a separate geotech engineer is involved.  I don't know what the local practice or code requirement is.  

You can get a rough cost estimate by doing some legwork.  For example, ask how deep a hole would need to be excavated for soil exploration.  Go to Hertz or local equipment rental and see what the rental charge is per day for the equipment.  

Walk around the property and see if there is a ground water issue that's causing the foundation settling.  For example if the property is on a slope, a french curtain drain installed upslope may be recommended to avoid further ground shifting.  

If you aren't comfortable with this particular structural engineer, find another one and get a second opinion.  Just my 2 cents, etc.  Good luck.

12 unit apartment building needs a AE firm.12 unit apartment building is commercial building, not residential.Especially when you are wanting to go vertical construction.You need architect, mechanical PE, structural PE, electrical PE, civil PE, and geotech.

Budget $20k minimum for an AE firm.You need to first verify site condition.Are there wetlands, protected areas?Add 6 months plus and more funding to do an EIS.

Someone mentioned a 4000 sq ft footprint.Get the architect to do a real quick basic design.The architect can then do an estimate on live and dead load.Then do a boring on site with the geotech to make sure the soil condition can support the building.If you are lucky, no special site prep is required.If soil condition isn’t ideal, then prepare to spend money on driving piles or other types of site prep to support the building.

Once you have these basic information, then you know you have a technically feasible 12 apartment building.A couple days of feasibility study won’t cut it.

The geotech information will be given to civil engineer and structural engineer.They will design the proper foundation.Structural engineer will design the load bearing structures.I personally like steel beam construction and concrete but they are more expensive.Civil and structural will work to design to seismic codes.

Mechanical engineer will do the plumbing and HVAC.Buildings need to breathe or they’ll rot from within.Electrical engineer will design the power distribution with appropriate protection circuits.Mechanical engineer will need to spend time to research and work on sewer connection to city or county sewer lines.If design requires digging up a public road for a tie in, it’s on your dime.There is a basic connection charge to tie in your sewer line.

Check with city of Bellevue on which IBC they are using.