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All Forum Posts by: Travis Bagley

Travis Bagley has started 9 posts and replied 16 times.

Post: Is a Cash Out Refi Smart In This Climate?

Travis BagleyPosted
  • Investor
  • Cincinnati, OH
  • Posts 17
  • Votes 5

Yes thank you for all the tips everyone. Honestly I never thought money was going to be the issue considering we had enough to get a few properties off the bat. I was all about using an LLC and now I somewhat regret that decision. It certainly impacts my earning/cash flow potential at this size. From what I have read and the feedback above it sounds like LLC = higher rates especially if you are a small time LLC. It is just the cost of doing business as an entity.

I'm pursing one more quote to see if we can at least get into the mid 4's, but everyone is right that if I want to keep growing we are going to have to refi. 


Thanks.

Post: Is a Cash Out Refi Smart In This Climate?

Travis BagleyPosted
  • Investor
  • Cincinnati, OH
  • Posts 17
  • Votes 5

@Andrew Postell These are owned outright. Thus far the only other deal I have found worth mentioning is a 10 year fixed at 4.85% on a cash out refi.

Post: Is a Cash Out Refi Smart In This Climate?

Travis BagleyPosted
  • Investor
  • Cincinnati, OH
  • Posts 17
  • Votes 5

Hey fellow BPers,

I have 2 properties inside an LLC and have found the refinance part of the BRRR strategy to be the toughest yet. I've taken every precaution to setup my business right and limit my personal liability, but in doing so it seems like I've turned off 95% of the lending world. My best offer right now is 5.125%, 30 year, 75% LTV with a 2% origination fee as well as a $299 app fee, 595 due diligence fee, and add on the cost of appraisal.

Rate my refi if you will. Is this worth doing? I'm estimating I'm going to eat $7,000-8,000 in fees and my cash flow will drop to about $300 per property accounting for maintenance contingency. 

SFR
Value$165,000.00
LTV75.00%
Loan Amount$123,750.00
Rent1650
Taxes1882
Insurance750
Dues0
Rate5.125%
Balance123750
Loan Payment$673.80
Total PITIA$893.14
Residual Income$756.86
DSCR1.847
  • 30-year fixed, 5 year prepayment penalty (1% of prepaid balance)
  • 75% LTV at 5.125%
DUPLEX
Value$175,000.00
LTV75.00%
Loan Amount$131,250.00
Rent1725
Taxes2232
Insurance744
Dues0
Rate5.125%
Balance131250
Loan Payment$714.64
Total PITIA$962.64
Residual Income$762.36
DSCR1.792
  • 30-year fixed, 5 year prepayment penalty (1% of prepaid balance)
  • 75% LTV at 5.125% (the same for both scenarios)

Post: Refinancing Multi-Member LLC

Travis BagleyPosted
  • Investor
  • Cincinnati, OH
  • Posts 17
  • Votes 5

Thanks @David M.

So how does this generally work if you have a multi-member LLC? Does one person guarantee it?

Post: Refinancing Multi-Member LLC

Travis BagleyPosted
  • Investor
  • Cincinnati, OH
  • Posts 17
  • Votes 5

Alright I never thought this would be the hard part of real estate investing.

I have 2 properties that are owned outright by my LLC. Properties are in the 165K and 170K area so not looking for a micro-loan or anything strange.

What does the refinance process look like inside of an LLC? Every time I call a bank or credit union things are great until I mention LLC. The second I say that I can hear an audible sense of confusion on the other side of the phone. I am finding that most 1st or even 2nd tier folks in the mortgage department are not experienced with this and have no idea what to do. I'm frustrated because I feel like they should be able to tell me what my options are and fully explain the process.

1) If refinancing a property owned by an LLC is it a commercial loan? Even if I am being asked to guarantee it personally?

2) Will anyone loan against the LLC and the property without a personal guarantee? I don't really want to be personally liable. It defeats the purpose of the LLC.

3) Am I going to get bad rates because my properties are in the LLC? So far I have only been offered 5/1 ARMS at over 4%.

Thanks and as always appreciate the advice.

Post: Wave Accounting

Travis BagleyPosted
  • Investor
  • Cincinnati, OH
  • Posts 17
  • Votes 5

I'd love to see if anyone has any updated posts about how they are doing this in 2020. 

Seems like the software looks a bit different, but still curious how you account for property value, appreciation, depreciation and things like that. Wave doesn't make it obvious if you aren't accounting savvy. 

Post: Rates Are Low But...

Travis BagleyPosted
  • Investor
  • Cincinnati, OH
  • Posts 17
  • Votes 5

Curious what everyone out there operating in an LLC is getting for rates and fees these days for refinances?

Recently got an offer for 3% on a 175K property that we own outright, but comes with a $5000 fee. Is that too high? LLC has turned off most from working with us.

Thanks in advance!

Post: Grace Period Before Lease Starts

Travis BagleyPosted
  • Investor
  • Cincinnati, OH
  • Posts 17
  • Votes 5

This seems obvious, but curious how other landlords are handling these situations.

Scenario:

You have a property you put up for rent and start receiving applications. You receive 2 applications. Both tenants are perfectly qualified.

Applicant A applied first but doesn't want to move in/start lease for 5 weeks.

Applicant B applied second but wants to move in/start lease in 3 weeks. 

Do you

1) Give it to B because they can move in sooner?

2) Give it to A because they were first?

3) Give it to A but tell them to bad the least grace period is a max of 30 days?

4) Ask for some kind of non-refundable holding fee for tenant A

Post: Lease Deposit Order Operation

Travis BagleyPosted
  • Investor
  • Cincinnati, OH
  • Posts 17
  • Votes 5

Hi BP,

I've seen a few matters of opinions on this in the forums and would love a concise answer to how this should be done. The verbiage of my lease agreement from Apartments.com says that "Resident agrees to pay a Security Deposit equal to $___ on/or before signing of this
Lease. 

1) Why would you want to exchange monies ever without a written agreement in place? What ensures the landlord upholds his/her end of the bargain if the landlord hasn't signed anything?

2) Asking a tenant for money before having a signed agreement seems sketchy. Have you had a tenant refuse to pay until the lease is signed?

3) What are the down sides to not collecting the deposit until signature? Some allude that if a signature is given and the deposit doesn't come the landlord can't lease to another tenant without legal action?

A long time ago when I was a renter I do not remember ever exchanging money without a signature. It seems like a better approach would be to have a clause that says if deposit is not received in full in 3 days this agreement is null and void or something...

Would like to know what you went with @Nicholas Nicastro