All Forum Posts by: Allyssa McCleery

@Brandon Williams Yes exactly! 

By paying an extra $25k-$50k you mean because the loan amount is higher now that you've pulled out cash? Yes I don't sweat that because I am paying less than 6% on the money that I am pulling out and am reinvesting it for 12% so I am still making money on that debt. You will be good as long as you will still have plenty of room to cashflow every month and you are achieving higher returns than what you are paying for. 

With what @Chris Hake says, it is true that your pool of tenants is smaller with more expensive housing. However, there are plenty of people who choose to be renters, whether they can afford to own a home or not. There are renters at $500/month apartments as well as $10k/month mansions. 

I would find out what the cap rate will be for the refinance and then you can determine what the value will likely be.

Are you looking to refinance to pull out money for another project or are you in a short term loan? 

My suggestion would be to try to work it out with the sellers outside of court first and maybe you can avoid the legal fees. If they are not willing to comply you can always take it to court afterwards. Just make sure you have all your information together and in writing before approaching them so that you have the benefit if and when it is taken to court. 

What is modular construction?

Another recommendation with college students is to have their parents co-sign on the lease. It will decrease your pool of tenants that will qualify but it will mitigate the risk. With college housing you need to have a great system in place to turnover units as quickly as possible because college students rarely renew their leases. @Nicholas Sheridan, Jr. is right that this can be a competitive market because investors see that there will always be tenants lining up to move into units so there is very low vacancy but very high turnover so the way to be most effective is by turning over the unit as quickly as possible. I went to Ohio State and we would have to have our leases signed by March to move into a place by August

@Adam Craig Nice to see another Ohioan! As far as your hard money lender goes, you can get much better rates. I have a lender who will do 90% LTV for 10% and 2 points (varies depending on the deal), but I have also heard of hard money for as low as 8%. I have not heard of any commercial lenders doing more than 75% so if you have one that does 80% can you please send to me? You say you refinanced 12 homes on the commercial side, was this a blanket loan?

@Seth Williams Can you elaborate on the commercial financing line of credit? Would this be a second position behind the mortgage? Do you know if there are restrictions? I am looking to do a new build of a carriage house and will be refinancing out of hard money in April so it would be after that once I am in a conventional loan. 

I have two properties in south Florida that are frame. I was afraid of them too when I first started but it hasn't been a terrible experience for me, granted I have owned first one less than 2 years. You will want to factor in additional costs for pest control. You will also want to make sure you are inspecting the property at least once a year to make sure there are not any termites. The good thing about frame homes is you have a lot more freedom to move walls. @Charles Soper is right that some houses stand the test of time. My houses were built in the 20s and 50s and are still standing just fine. @Brandon Reed it is true that insurance is higher but not by a very significant amount. As long as you know the risks and factor them into your analysis you should be fine, and you also may not have as much competition because as @Brian Garrett stated, there are a lot of investors who avoid these types of properties. Of course anything with investing comes down to your level risk tolerance.

@Orlando Perez I am still very early in the process of setting up a syndication but I would recommend talking to @Kevin Dean as he was very helpful in helping navigate the process and works with a very prestigious company. I think for a lot of investors the most important thing is being able to trust someone with your money. I would love to hear more about your friend's experience in seeking out a fund and what type of investment he chooses. 

I would say that @Chase McArthur is giving you a great opportunity to get a lot of your questions answered and make sure you are analyzing the deal correctly. We are so fortunate so live in their era as investors where we can connect with mentors so easily. I agree that networking with property managers is extremely helpful. You can seek them out by searching for the types of apartment buildings you are looking to buy and then finding the managers through the for rent signs and find ways to add value to their business. Brandon Turner suggested bringing donuts to their office every few months and you could also send them any articles of interest you come across that is relevant to their business or market.