All Forum Posts by: Suhan Junaid

Hey @Niraj S., developers / builders may drop their prices in reaction to an interest rate hike, but that assumes the rate hike takes buyers out of the market since the cost of a mortgage went up. However, if the rate hike just slows down other aggressive buyers, then they may not drop prices...especially since the rate hike was small (~0.25%). 

Bear in mind, I'm not specifically familiar with the Gilbert market though.

Hey @Clay Walker, I have a background from Wall Street, but the following is just my opinion: The Fed said in 2015 that they'd raise rates 3 or 4 times in 2016 but only did it once (there are various reasons for why). My sense is rates will rise maybe .25% or .5% in 2017. I think the effect this will have is to slow the rise in prices. As the cost of money goes up, the economics of various properties goes down since your monthly payments go up, so buyers should become less aggressive. 

I think the rate increase will slow the rise in prices not necessarily cause a market correction, in that prices will go up more slowly not come down. The economy is still healthy, and interest rates are relatively low...so good times, with decent price appreciation will probably stay through 2017. I think toward the end of 2017 (3Q or 4Q), is when you should definitely check in on the health of the economy / market again (or just generally keep an eye on the pulse constantly).

Hope this is helpful.

Hey @Tayo Dare, I've done it (in Florida), however, at closing I was essentially "reimbursed" by money from the LLC.

Hey @Jeff Bisgier, congratulations and welcome to being a property owner! There's a lot of good info in prior posts so I'll refrain from repeating. The one additional recommendation I would have is that if you can squeeze in one more bedroom and at least a half bath, then you can better market to families (vs maybe roommates). My experience has been that families then to be more long-term and stable tenants. 

Hey @David Zheng, some other ideas to keep your tenants from doing things you don't want - get parents to co-sign leases if possible and include (small) monetary damages for hosting parties over X amount

Hey @Leo M Christensen, I don't fully understand some of your abbreviations (like m2, etc.) - but generally the way I would look at it is if you're investing for cash flow or appreciation. If you're following the BRRRR strategy, you're keen on how much cash you can pull out from each purchase to redeploy. In the US mortgage market, 6+ multifamily unit is considered a commercial property (5 units or more are commercial here). In commercial loan situations (in the US), the property generally has to support the mortgage payment, expenses, etc. from the income it generates. Therefore, you'd probably favor the property that has the strongest cash flow. If commercial loan situation is not true in Denmark - then probably look at which property can appreciate quickly (so long as it's profitable enough) so when you refinance, you can pull out the largest chunk of cash.

The other way I'd also evaluate this is which property has the best return on equity: as in how much free cash flow you get per dollar invested. For instance if I was looking at property that cost US$100,000, required 25% down (equity) - so $25,000 in this case, gross rent of $1,000 and monthly expenses of $300 so net rent after expenses of $700. So you're getting $700 for investing $25,000. So your annual return on the $25,000 is 33.6%. That's ($700 * 12 months) / $25,000. 

If you can clarify the numbers above, happy to revisit.

Hey @Hannah Wilkinson...I personally feel there are no obvious advantages to using conventional vs. portfolio lending. Portfolio lending is typically when the bank keeps the loan / mortgage on their balance sheet instead of selling (syndicating) it to other banks or credit investors. Banks typically standardize the loans they originate if they sell them off, especially to Fannie and Freddie (Fannie and Freddie are buying such large amounts of loans they have have policies dictating which loans they would like to help them - Fannie / Freddie - manage buying loans from originating banks).

Portfolio lenders can be more flexible since their credit officers are not worried about selling the loan into the capital markets. The benefit to portfolio lender is that they can work with you on a case by case basis. The downside is that the underwriting process may take longer since it's not standardized.

So I would just look at the terms being offered by either conventional or portfolio lender and see what works best for you.

In my experience conventional lenders are great for resi transactions because they can act quickly. On the commercial side, I've had the best experiences with portfolio lenders given they can be more creative / flexible with terms / structure, etc. 

Hello, I'm new to the community but have been involved in real estate for a number of years. Initially as a broker (going through my Florida licensing again now) and most recently as an investor for the past 5 years in both residential and commercial real estate. My currently have 5 properties which consists of 26 units. I'm working with a JV partner to build a senior living / assisted living facility in South Florida as well as working on acquiring a local strip center.

Prior to becoming a full-time real estate investor, I was an investment banker on Wall Street focused on basic industries and then healthcare ($20bn of transactions across M&A, leveraged finance and IPO / equity offerings).

Looking forward to learning from everyone and contributing where I can!