All Forum Posts by: Todd Rasmussen

@Sarah Jenson

Kids are notorious for ruining family businesses. Most of the time because they have a better idea. Learn everything you can from how your parents have created the wealth now at your disposal and do that until you can repeat it successfully. Making mistakes with debt service is going to be exponentially harder than making mistakes without it. Once you have their system down, you can start making small changes that you can reverse if needed. If you have wealth you have the luxury of investing it conservatively and still having a very comfortable life and growing that wealth for the next generation. Leverage is a great way to grow, but comes with higher risk and debt is impatience expressed financially. Full disclosure, I used maximum leverage to scratch my portfolio into existence so my kids can by properties cash someday.

@Peyton LaBarbera

I haven't seen a lender that will put houses on the same loan across state lines. Individual state banking/lending laws make that all but impossible.

@Alex Buffone

I'd go the other way with it. Tell her that by taking the house subject to the existing mortgage, you'll pay down the first mortgage at a greater rate and can refinance her out in the shortest possible time period possible and see if she still will do five years. Even if rates put you in a position not to be able to easily refinance, you could just keep paying on the first and sell an option or write out another note to sell and buy out her position.

@Ivan Avellaneda

I have a lead on a triplex in TN if you aren't married to IN. Sending you contact information for my originator in PM.

@Richard Tyler

Assuming you are pulling money out of your primary residence to invest in real estate, have you considered just cross collateralizing your equity? 

@Anthony Freeman

The same working with a bank except the buyer gives the seller a mortgage or a deed of trust instead of a bank. Technically, I'd write the promissory note as a purchase money note. Most title companies can provide both a note and the mortgage or deed of trust paperwork. You buying or selling in this scenario?

@Account Closed

There's a few variables to this equation, I think generally, the cost of selling and buying something else would be more expensive than making an infrastructure upgrade if it's within your resources to upgrade. What's wrong with the electrical?

If you want to get into it, I think we'd need to look at:

NOI

Cost of upgrade

Debt Service cost and terms

Current cost basis

Cap rates in your market

Your formula will have to balance the cost of selling and buying something else against the cost of capital as well as making sure you aren't throwing good money after bad and are making a worthwhile return.

@Joan Garcia Hernandez

You are off to a great start! Good work

@Anup Jung Karki

Make the family friend a partner and the money can come from them, otherwise it will need to come to you.

DSCR loans will typically require the debt service coverage ratio to be 1.15-1.25 with amortization of 20-25 years. In the south, I'm only finding 5-7 year fixed. Should be able to find a DSCR loan to do interest only during the construction draw period, but if you don't already have a relationship with the bank, it might be hard to get them interested for a SFH.

Good luck!