All Forum Posts by: Dave Craig

I have a good opportunity with an off-market deal that is currently exclusive to me. The purchase price is right and the seller has an assumable mortgage in place at a very good rate. The problem is that the mortgage is only about 42% of the purchase price. I have the remaining balance in cash but that ties up a significant amount of capital and overall isn't really justified in the ROE. Are there options for assuming the existing mortgage and financing the remaining balance with another mortgage? Putting up 58% turns a good price on this into a bad deal. It would almost be better just to finance the whole thing on my own without assuming the existing mortgage. I'm hoping there are options that allow me to leverage the good rate on the assumable amount and not dedicate so much capital to the deal.

Thanks Sean,
I figured that must be the case but have been unable to find clear documentation of that. The clarity you provided is much appreciated.

I'm targeting a purchase price of $410K for an 8 unit. The only responses I've received so far were that those particular lenders don't prefer to do DSCRs with a loan amount under $400k. The lowest interest rate on offer was 9.6 which knocks cash flow down enough to barely be worth the effort.

I know this is a very basic question, but I've read quite bit about real estate investing and taxes at this point and haven't seen it clearly stated. Since the LLC is a passthrough entity, do the business expenses (plus your personal itemized deductions) have to exceed the standard deduction for a personal tax return to even matter or is the fact that this would be included in the calculation for Net Profit allow you to get the benefit of "pre-tax expenses" separately from the portion of your taxes related to your personal 9-5 income?
Similarly, if your business operates at a loss, does that loss plus other itemized deductions also have to exceed the standard deduction before it becomes a factor?

I'm considering a multi unit property over 4 doors, which pushes it into "commercial". The primary options for financing appear to be limited to DSCR loans. Not only are the interest rates ridiculous, the lenders so far want the loan amount to be above what I even want to pay for the property (meaning they aren't interested in financing a smaller amount, I guess). Are there obvious options I'm missing? I qualified for a conventional loan at well above the asking price.

Title kind of says it all. Need a good CPA on my team to help with tax planning, etc. Any good recommendations? 

I would keep the existing tenant. It is SFR. I am working with an agent.

Thanks for all of the helpful replies. Yes, the reason for no viewing is self-explanatory. Since this would be my first deal, what I was really asking was 1. Should I even be considering this as my first deal ever? and 2. If I should consider it, how should I go about it and what documentation can I ask for to help with the decision?
@Ren Lok, if you want to go ahead and snatch that up so it's no longer a consideration for me, that might be helpful too. :D

Was made aware of a house that just came on the market today. Existing tenant but no viewing until under contract. This would be my first property and that just sounds too risky to me. Are there documents or info I can ask for that could make this a more solid deal or should I just walk away?

I personally live on a rural property and I've seen a few rural properties that I'm interested in, but I don't want my personal preference or things I might like to influence my investment choices so there's a bit of learning I need to do regarding the investment value of those in this area.