All Forum Posts by: Alejandra Roca

Hey @Ryan Keenan I ended up going with the conventional loan and really the pace of 2 investment properties per year has worked out well for us. 

@Andrew Postell Hello Andrew, it’s two single family homes and a duplex. Not absolutely necessary to do a commercial loan, but we’re looking to build a relationship with that bank, as we’re planning on purchasing a 5+ unit this year as well. Thanks!

It's our first time applying for a commercial loan. The bank is offering 6.5% 15 year loan, where the first five years are fixed, but after that it becomes a variable rate. The caveat is that there is no cap on the rate. It could change to any percentage at any point during the lifetime of the loan. If the rate does increase to a ridiculous amount, the out would be to re-finance. But paying closing costs twice within 5-6 years would completely diminish any profit made by the investment. Does anyone have experience with no-cap commercial loans? What advice could you offer? 

Thank you guys. I understand the difference. With brick homes the difference in premium can be tremendous and eats at profits. Even if something were to happen to the home, we would never re-build with the original materials. Just trying to figure out if this is truly a Fannie Mae and Freddie Mac requirement. Some banks say it is, other banks don't seem to require it. We're getting mixed responses. 

Hello, 

We are looking to buy our second investment property in Missouri. Our first property was a 4-plex, and it was purchased through a conventional loan. Towards the final steps of the process, the lender indicated we needed to insure our property to cover full replacement costs. Since the 4-plex is an all brick property, replacements costs were much higher than the purchase price of the property, so our insurance policy turned out to be very expensive.

We would like to avoid a repeat of the same situation. However, I'm getting a lot of mixed messages from different lenders. For conventional loans, some banks say they do require replacement costs, and others indicate that as long as we are covered up to market value, then we should be ok. When is replacement cost really required? Can we avoid replacement costs and still get a conventional loan? 

Any help would be greatly appreciated! Thanks! 

Thanks for the information everyone! 

Hello, I'm just starting out in real estate investing. I have plans to acquire 30 properties in the next 5 years. I'm looking to find a good way to finance the deals once the cash runs out. How do Portfolio Loans work and would it be a good option for someone who is just starting out? I'm interested in taking a loan through my LLC.