All Forum Posts by: Francis Louis Vogel Jr

Great post!

Stephen,
Some questions you did not present were.
1] Deferred maintenance costs
2] Is the sales price consistent with area sales comps
3] Are the rents at market rates
4] Quality of tenant leases, age of lease, tenant income and lease agreements

When your trying to get financing overpaying for an investment property will be problematic.

Good luck, great post.

You hold all of the power in the negations you're the buyer. Based on years of experience working with commercial property investors and their agents they love the come up with sales prices that will never be able to get financing. Remember, when you find a lender willing to finance, they will preform their own due diligence by ordering various reports such as a property inspection, appraisal and environmental.

This in-turn will determine the potential risk of any proposed loan. For example, loan to value, loan to cost, after repair value, interest rate, amortization period and fixed term is there is one.

Always be willing to walk away. A bad deal could bankrupt you.

Nick,

You need to contact a commercial lender or broker for these type of loans.

Typically a non-owner occupied rental home is not considered a traditional home mortgage for example 30 year fixed / 30 year amortization let's say at 2% or 4% interest rate.

A non-owner occupied rental home mortgage is different. For example The fixed term period is much shorter with 5,7 or 10 years with amortizations that are much shorter than 30 years.

Interest rates for these types commercial loans start around 6%.

Loan to value is another consideration with a home mortgage it could be up to 80%+. A commercial mortgage is going to be lower 65% - 75%.

Commercial mortgages also have business and personal capitalization requirements along with past experience.

All great strategies.

Great post.

Great question and answers. A SBA loan is in order for the Self Storage. SBA loans are full recourse, please keep that in mind.

Great post.

Keria,

This is a big future question. Your first real estate purchase for investment should be at 2 plex. Your tenant pays your mortgage and most of the expenses and you bank most of your pay check. As far a career, think a skilled trades degree, a pay check is attached when you graduate with a 2 year community collage degree. At your age this may be able to be free to you.

Great post. Good luck.

Great post with great answers!