All Forum Posts by: Sunny Shakhawala

@Jeff S. Thank you!!

I really appreciate the candid reply. 

I was on the fence about having the borrower sign a deed-in-lieu. 

My friends who suggested it made it seem like it was so black and white: They default, I take the property. I knew it couldn't be so easy. 

The major benefit I see in a DIL is the scare tactic imposed on the Borrower...

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Do you know what a "Confession of Judgment" is? The borrower I'm lending to has signed one of those before and is willing to sign it again. To me, it seems like a DIL. 

Hey Everyone,

About to originate a new loan for one of my borrowers. I've never used a deed-in-lieu of foreclosure before, but a few friends have told me to include it in my packet. 

Question: If I have the borrower's sign a deed-in-lieu before closing the loan, what would trigger my ability to exercise it? Or am I able to exercise it at any point? That hardly seems fair.. I mostly see the value of a Deed In Lieu if the borrower's sign it in advance (before getting themselves into trouble). I doubt any borrower would sign it after they have my money...

Can someone explain to me the correct way to document it? Does anyone have a template I can use?

Are there any borrowers here that have signed a DIL for a Private / Hard Money Lender at or before closing? If so, would love to see it. 

TIA.

Similar yield, much less work. 

No tax benefits. Trade offs. 

Went to this event last year. I met someone there that I went on to help close a 40 unit deal. 

I also met a handful of people that I still bounce ideas off of today. Dave runs a high quality event. 

Can't wait to attend again. 

FYI: I bought 5 tickets to get the early bird + 20% group discount. 

DM me if you want one. 

Only 2 left.

Love that you sold your SFR and moved into a rental.

Burn the ships!

@Andrew Angerer

The new law you're referring to is the cap on interest expense deduction. You can't write off more than 30% of your NOI in Interest Expense. Nothing to do with ownership.

So let's say you have 100K in NOI at the end of the year.

But your loan has 40K in interest expense.

You would only be able to deduct 30K as a write off. 

The remaining 10K wouldn't qualify for write off.

Why did they do this? To prevent over leveraging. 

I am involved in a lot of syndication deals. And many of them have greater than 30% of NOI as interest expense.

So while they may not be taking full advantage, there's still an advantage to be had.

@Scott Nguyen

@Scott Nguyen If you can find a good sponsor, Syndications are a great way to go. I think, if underwritten conservatively, larger assets (200 unit apartment buildings) are less risky than smaller assets (SFR).

@Jason Graves I recently heard this rule of thumb: If you can realize ten years of cash flow through equity today, sell. Youre right there. 600x12x10 = 72,000. Vs 75,000. Coin flip. Can you 1031 into bigger and better? If so, yes.

@Thomas Welker Mortgage is not an expense. Expenses are profit & loss statement items. Morrgages are liabilities. Which belongs on the balance sheet. This is why you hear people always say, “the cap rate is the % return if you had paid 100% cash for the property”.

@Jean-Thierry Aleman Google credit unions in your area. Make a list of 20 banks with phone #s. Start dialing. Dont stop til you call all 20 and speak to their loan department. Take notes on terms and compare. Make sure the LOC is interest only payments for draw period. Good luck

@Jim Growfer Encourage you to read some books before reaching out to brokers. I think you need to be way more specific than that. Big Money In Small Apartments is a good one The A-Z criteria chapter in Grant Cardones book is good too. It’s free at grant cardone dot com / free books. Multifamily Millions is good too. But probably more than you need.