All Forum Posts by: Blake Garcia

With rates as reasonable as they are, I would take the savings currently offered and be onto finding the next deal. Realizing that your time and effort is worth something plus the refi and appraisal costs. Save the focus for finding new properties. If $60 a month is make or break you need a new deal. Adding even 1 unit is worth multiples of what chasing an extra 0.25% on a refi is worth on a monthly basis. At that point you're looking at effort spent for $12 a month.

For every 100,000 borrowed:

5 %  - 25 yr - Annual Payment - $ 7015 - Monthly - $ 584

4 % - 25 yr - Annual Payment - $ 6334  - Monthly - $ 527

Savings of $681 Annually or $56.75 Monthly

or 

5 % - 20 yr - Annual Payment - $ 7919 - Monthly - $ 660

4 % - 20 yr - Annual Payment - $ 7272 - Monthly - $ 606

Savings of $647 Annually or $54 Monthly

Yes refinancing can make a huge difference, but with appraisals, closing costs, environmentals, you can easily look as spending 5k-8k on a commercial or 2k on a house. 

How many months does that take to break even with newly saved cash flow? 

On my properties saving 2% it's a 5 month break even on a 5 year term.  

@Corey Law

Depending on the interest rate of the first I'd leave it alone unless there is massive equity. 

Double closing costs and ending up with 2 new appraisals should be considered. 

If you have good equity consider a line of credit or looking to refi both properties together with the same lender. Sometimes lender flexibility is more important that rate alone.

I'm Refi-ing my apartments. Hoping to close next week. 4.35% 25 year. The 0.5% drop from yesterday will make a difference but I don't see lenders coming down all the way. I'm just happy to get down from my 6% and save my $600 per month on each property.

@Daniel Alzate Also consider getting property taxes appealed / negotiated. It probably will not help in the immediate purchase, but if the tax appraisal is higher than the purchase price or current/future performance you can easily save thousands. My attorney only charges based off the savings and checks back annually on them. 

Get good relationships and meet the actual repair people. I spent 15k by paying retail for plumbing, HVAC, and electrical on my houses before finally getting to work directly with them as freelancers off the clock. Everything cuts to about half price if you can work with people off the clock. 

I market the hell out of my listings as soon as I know it's coming. I show them before they are even complete, but lots of people like to see you spend the money. It shows that you'll make the repairs later down the road.

I average 3-10 days vacancy on a turn and 3-4 weeks on a total remodel. A less than 5% vacancy is definitely doable even in a small market if you push it and run like a business and not just an investment.   

Setup a basic accounting system. The $50 buildium or similar systems cost will save you hours of excuses collecting rent. I recommend the online payment and get used to the accounting so its like a machine by your next purchase. Make statements and late fees auto from the start.

@matthew anderson

Im sure this is a state by state issue. With my purchases the leases were usually expired or in month to month status or missing. Tired andlords tend to have ****** records. 

If they chose to push the issue and their lease was still intact you may have to go along. If you leave the pricing the same and offer to lock in their price at current rate nothing changes for their end but you now hold a good lease with your standards. You could sell it to them as locking in their price. 

If they choose to sign new lease the newer of the 2 documents would have the authority. Nothing illegal about offering an updated lease and an application for good contact records.

At that point if they choose to not sign new its a red flag or at least plan on this being a possible high maintenance possibility

I would hit them with a new lease or allow them out of their current lease on day 1. Ive now bought 3 different complexes and the sooner you take control the better the results. I highly recommend being seen and requiring an application and onboarding to your system. You may have to cut ties with some but it sets a standard of what is expected both directions. I fought tenants to change from where the previous landlord picked rent up at their convenience. After 3 months i realized over half of them were probably only paying about 9 months of rent a year because of bad book keeping and excuses. I now only have 2 of those 8 original tenants after 18 months

By the given month.

Just listened to landlording on autopilot... mike butler mentions where people choose to rent / pay bi weekly in their lease. You actually gain an extra month of rent per year because of 26 periods instead of 12 months

Repetition is key. The more bids, offers, and sales you get used to the process. Offer low if its reasonable. Sometimes its not. Depends on the market. Id recommend offering aggressively both low and reasonable just for experience. Everyone likes some chase eith counter offers. 

I also realized after 5 houses that an absolute bottom dollar wasn't always worth it. Paying 500 more on a house is 1 extra month of rent. Buy the house and look for the next deal. Each deal done bumps up your experience mentally and also proves that you can close to others. I bought my first apartments easier than i did any house because its all the same basic process.