All Forum Posts by: Andrew West

It's impossible to answer that question without more context.

Is that $250/mo cashflow on a 500k property you paid for in cash? Then probably not.

Is that $250/mo on a 250k property that's 90% leveraged, after debt service and expenses? Then maybe.

You also need to look at total return and compare those numbers with the returns you could receive from other investments

I use Milli. They're a mobile only division of the First National Bank of Omaha. They're currently paying 5.25%. There are plenty of other options that are 4% plus as well If you don't like the mobile only format. 

I keep 6 months PITI for each property. I also try to knock out any upcoming maintinece issues and budget for looming capex when I purchase a property. I have access to several lines of credit.

I keep all of my reserves in a savings account earning 5.25%.

Another consideration is how much steady W2 income that you have to supplement repairs and maintinence as issues arise.

Hey Corey, looks like you have some good options.

Make sure when you calculate your ROE you are including mortgage paydown, appreciation, tax benefits, and leverage. 

With the last deal I wrapped up I've used up the last of my conventional mortgages. What are my options for financing going forward? 

The last loan I received was 5.75% 30 yr fixed with 30% down. The quotes I got for DSCR are 8.25%+ with a 5 year pre payment penalty.

I had a 10 property portfolio under contract recently and the commercial terms I received were 6-8% on a 5/1 arm with only 20-25 year amortization. 

The higher interest rates and shorter amortization hits returns hard. Any other options?

The properties I like to buy are 80-120k with good cash flow. My broker said their DSCR lenders won't lend on a loan amount that is less than 70,000, which rules out the less expensive properties with higher down payments.

 Tanks for the advice Erik. What are some ways to determine if a lender is able to perform?

I have a ten property portfolio under contract, nine single family homes and one duplex.

This will be my first time using commercial financing and I'm curious how good the terms are and what my options are.

The lenders I have been working with have all been quoting me similar terms:

5/1 ARM, 6.5%, 10 year term, 25 year amortization.

What are your thoughts on these terms? Are they negotiable, and are there other options I should be looking in to?

Welcome! I have property in Grand Rapids, great city.

@Brent Kiger I appreciate that. Thanks again, I'll look into his work.