All Forum Posts by: Damon Pendleton

@J.R. Libby I encourage to seek some legal advice from a local lawyer. I’ll say that I own commercial and it’s always in an LLC with properly drafted operatimg agreements and I always carry adequate liability insurance coverage.

Not that I'm aware of. Google Fannie Mae and Freddie Mac Multifamily and you will find the programs with the basic terms on their respective websites. There is also a lot of information on BG about those programs as well but I'd start with the sites then come back to BG and get an idea of folks experiences using those programs. 

Bruce, have you and the broker looked at agency financing programs that might extend that to 30 years with that 25% down? 

Can you service $1.3 MM with $90k gross rents before you take out expenses?

I’ve done two commercial buildings so far like this and  I’m always looking for opportunities to do it again and again. I like it because I pay myself market rents and I know I have at least one tenant who always pays on time every month.  

There is nothing mystical or hard about it. Make a list of what you need in a building (think about the next 3-5 years if you’re in growth mode). Then interview some commercial brokers, and start talking to some lenders. Also you can qualify for SBA loan of your company occupies over 50% of the space. I can refer you to the broker I used who specializes in SBA loans if you’re interested in going that route after researching the issue (I get nothing nor have any relationship with them other than being a former client). 

Check with your local attorney to see if you can just purchase the next property with your LLC holding a 50% interest and your investment partner (or their LLC) owning the other 50%.

At least that would be my starting point before I created another entity unless I had other reasons for doing so.  

@Maribel Alvarado if you haven't already, check out the book Due Diligence for Commercial Real Estate by Brian Hennessey. 

I don’t understand why you didn’t get some docs during your due diligence period?  Like copies of the leases??

Also I’d never use that attorney again and probably step away from that agent too. Neither seems to be protecting your interest. 

Obviously consult an attorney in your state if you really want to know the legal consequences but from the sounds of it you have one option- rifi. If you haven’t given him the $5000 you don’t have an agreement for an extension anyway. You chose not to do an inspection. You’ve had 3 years to get financing in place knowing the balloon was coming. Any attorney worth their salt would cost you more than the cost to refi if you chose to litigate this roof issue and I doubt you have a slam dunk case. So lesson learned- now rifi, move on, and next time get an inspection and/or add language in your contract that addresses this type of potential issue. I promise that most of us have learned a lesson (or two) the hard way so I’m not judging you on that.

Michael, in my neck of the woods I see RE investors rebuilding neighborhoods, creating jobs, reopening storefronts that have been closed for years, etc. I’m very proud of the work we do. People are certainly being priced out in some areas but the underlying factors for that are many. I certainly wouldn’t blame the average RE investor for the need for better public education, inflation, rising cost of college education, or even creating the need for low income housing. And we collectively don’t make any economic policy. If we added all the deals on BP I doubt an economist would have them moving the needle much on the US economy. That doesn’t mean we won’t see a cycle in the RE/stock/capital markets but most of us are just trying to insulate ourselves from how that cycle will impact us and some are trying to be prepared to take advantage of the next down cycle.