All Forum Posts by: Toben B.

16 units looking for cash out around $700K

Looking for banks willing to do cash out on a commercial loan in small market!

I purchased a small fixer upper apartment building  in a small town of 35,000 about 45 min outside a decent sized metro. 

My funding options were not so great as most banks do not like small deals and small towns. However I bought it right and a bank that knew me did the deal. 

Now three years later I fixed it up, the property is 100% occupied and the property has more than tripled in value and I am getting interest from buyers. 

However after taxes and depreciation recapture and paying back my original loan I may be better off with a cash out refinance.

My original loan was small and amortized over 20 years.  Looking for a bank to do a large cash out refi and amortize over 30 years. 

Looking for a bank to do a loan in the $700K range and finances will support this.

Thank you!
 

Well I put some properties out there at nose bleed prices and did not get them. I did get offers at 90% of my ask. In a different year I may have taken them but rents just keep on climbing in my region. 

It seems I will keep my properties and try to keep some of the profit. Right now most of my rent increases are getting eaten up by crazy high HVAC repair bills. This week it was $8K to replace HVAC in a 3 bedroom house. That is nuts!

I kept getting taken by grandmas as a landlord. 

Guy quit/lost his job? Too bad - pay or quit.

Lady with 3 kids claims she can't afford rent? Too bad live somewhere else. 

Sweet old grandma lady gives me a sob story? Fell for it every time. Multiple Grandmas owe 3+ months of back rent. 

I now use a property manager so  they can meet and get to know and evict grandma.  

I live and own in a secondary market that has seen a crazy run up. Houses are getting multiple offers $20-25K over asking. I also own a small apartment complex in a tertiary market. 

RE here seems to be at red hot nose bleed levels. I am seeing prices that will not make a return for years and appear to be disconnected from reality. 

I called a broker to see if he was seeing what I am seeing. He said he has an property under contract at a 1 cap and sees 4 caps in the tertiary market. 

Ideally I should have refinanced and cashed out a few months ago, but I missed that window.

Are you seeing what I am seeing or does everyone think rents will keep going up 20% a year?

I am getting tempted to sell it all and walk away for a few years or at least until sales prices and profits start to make sense again. 

I think I can get a 300% return on my apartments and 400% on my houses.  I bought cheap and held after the last crash so I have tons of equity but not that much cash flow. 

What are you seeing in your markets?

This depends on your state. You probably don't want to use a contract not setup for your state. 

Oklahoma gives out free sales contracts. https://oklahoma.gov/orec/cont...

Hello - I am considering exiting the market or just re-mortgaging everything to have cash.  

I started buying 14 years ago and built a portfolio off bank foreclosures from out of state investors who tried to run things remotely. 

I focused on some rough neighborhoods and did really well because no one wanted to buy on those streets in the depths of the last RE crash. I noticed all the houses were full of people paying rent so even though the neighborhood wasn't the best you can always find a paying tenant. 

Now I haven't done a residential purchase in over 3 years because all the deals dried up and the market seems to be getting frothy with out of state investors moving in again. Most of my properties are worth at least 3 times what I paid for them while rents have not even doubled. 

If I sell them the capital gains, agent fees, and depreciation recapture will take a large chunk of the profits plus I need to pay off the remaining mortgages. 

If I re-mortgage everything I end up with about 80% of the money and still own the houses but my cashflow will be significantly less. 

The goal is to have cash for either the next big deal or next downturn. I am not able to predict the market but it seems frothy around here. At times I have mortgaged a property then sat on the cash for 2 years because I could not reinvest it. 

Any suggestions?

It depends....

If you get lucky or have low expenses you can. 

I have over a decade experience and now have 30 units. When I got to 12 I had to hire a property manager in order to continue growing. The workload was too much with my full time job.  

Unfortunately these are mostly lower class properties and although I now have some decent cash flow I can not live off of it. When they all get paid off I will be in a better spot but would take a big paycut if I treat this as anything other than a side hustle.

If I happened to buy in other areas or had managed to close some of the large deals I missed out on then maybe I could live off it. But lets be realistic - this is not passive income. I still have work to do.  

I have attempted this before and found out if they are connected to each other you can get the better fannie mae financing that are the best rates out there. You also need a loan over $1million to get these rates. If there is an empty lot or another property between them will have to go with single family or the less desirable commercial loans. 

I did it by reading all the leases. I found some minor deposit amounts that were different but otherwise it was fine.