All Forum Posts by: Tim W.

I'm not a R/E pro, but do work in the finance world. I think one of the biggest risks you face with Cash Out is interest rate risk.

It's really difficult to predict where interest rates will be in a 2-5 year time period, so it can also be challenging to model out future mortgage rates. While the Fed looks to continue their trajectory of cutting short term rates, I suspect the mid and long points of the yield curve (particularly the 10 year, which is what most mortgages go off of) will stay elevated. 10 Yr treasury today is 4.4%, but if it goes up to 5% or 6%, your mortgage will likely be in the 8% or higher level, which then hits CF even more.  

It's really hard to predict where rates go from here. We're likely in decent shape the next year or so, but in my mind, inflation will be key to watch. higher inflation will mean higher rates- may be good for property values if the overall economy stays strong, but inflation will likely raise interest rates. 

I was curious to get your thoughts on whether you invest in RE for Cash Flow or Appreciation?

 In an ideal world, we'd look to get both, but with today's higher interest rates and rising home values, it seems harder for deals to cash flow. 

I've decided to focus in Pittsburgh where the Price to Rent ratio is quite reasonable. I've built my business plan for 2025 to go after Cash Flow first, appreciation second, in B and C+ areas. But I also realize many people choose the direction of Appreciation first.

In my hometown market (not Pittsburgh, but central NJ area), few small to mid size multi family properties could come close to cash flowing positively. People seem to buy mainly for appreciation, but I'm not sold appreciation will continue to rise the way it has the past 5 - 6 years, so feel like CF is the safer investing avenue for me. Would love to get everyone's thoughts!

Hi all,

First time investor and am under contract on a 4plex. During inspection, it was learned that there was  a fire at some point in basement. Floor boards were severely charred and inspector worries there could be damage to framing in parts of the house we can’t see (in fact, that side of the house seems to be sagging anyways, which is worrisome). 

This is an early 1900’s property, so was expecting issues (which there were many before the foundation issues). But the property has not been well maintained over the past decade or two, and foundation issues scare the crap out of me. 

My gut says I need to cut off of this deal,  but curious to get your perspective. I got a good deal on the property, but the list of fixes has gotten longggg and expensive. 

I appreciate any perspective anyone with similar experience can share. 

Thanks much for all this insight! Really appreciate it!!

Hi All,

Was hoping to tap the groups expertise on explaining/guiding me on financing options. I'm looking to by a 4-plex property outside Pittsburgh for about $220K, and am confused about lending options.

I'm 41 and have a successful career thus far in the Investment Banking space. So i have pretty sizable personal assets, along with a relative high income. Due to my personal assets, i really need to have the Loan under a newly created LLC for liability protection. I also am fine closing my purchase in cash, and refinancing shortly thereafter (or even down the road in 6-12 months).

So for my questions:

1) I've spoken with some mortgage brokers- they all seem to charge a lot of upfronts and are telling me I need to do a DSCR loan. Is that really the only option available via a mortgage broker? Are there other options i should be asking for?

2) I haven't yet reached out local banks, but seeing the quotes from brokers makes me wondering if Banks may be better? I'm fine if things get drawn out weeks/months, and would not mind building personal relationships with Banks. But I'm wondering if the LLC loan is a no-go for banks.

3) Last question- i'm seeing rates on DSCR loans in the 7.2% to 7.5% range, in addition to 1 to 2 points and they likely track 10 yr treasuries (4.26% as of today). Is a roughly 3% premium to Treasury's typical for a commercial/DSCR loan?

Many thanks for any insights & guidance.

Tim

Great share Gabriel & congrats. I'm newer to multi-family and doing something similar in Pitt. Will share a similar update on mine when under contract. 

Hi- I'm new to BP, so apologies if i'm not going about this in the right way. 

Could anyone provide some recommendations for property managers in the greater Pittsburgh area?  Looking to buy a quad plex and have it professionally managed. 

Thanks!

Tim