All Forum Posts by: Dave Rav

start small.  Learning from those mistakes is recoverable.

Thanks everyone for your feedback!  Over the years, I have become increasingly aggressive with my aims for cashflow provided from rentals (in "dollars per month" terms).  I just wanted to take stock of the community's objectives and goals when it comes to CF.

At this time, I'm somewhere around $300-350 per month on SFRs.  However, this is different in the case of multifamily properties.

I agree.  If you buy/sell in volume, many state rules may even require you to get a dealer's license. Especially if you start doing business with manufacturers and other dealers.  Some (not all*) may frown on you not being licensed, and this could develop into risk for you.

That said, doing 1 transaction as a "test" without being licensed would be ok.

Hey all!  I wanted to ask the membership about CF.  I currently own several rentals and am wondering what number my peers aim for with respect to net monthly profit.  Before we proceed let me define what i mean.

Basically, how much do you pay yourself from each rental unit (or aim to pay yourself)? Net monthly positive CF - this would be net monthly profit, after ALL expenses. These expenses include PITI, repairs, reserves, property mgr (if applicable), and anything else you deem necessary. Thanks for your input!

Ugh, I feel your pain.  I'm in a similar scenario, though my payments usually come 15-20 days late.  Either way, its annoying. 

How was your transaction executed?  Mine is basically an installment contract that was signed and notarized, but never "closed" or recorded at the county.  Therefore, i feel its not quite valid.  More like a lease.  We've been going 6 or so years now, and the "Buyer" (aka tenant) is a total dunce.  He is at-risk of losing the great deal Ive handed him.  Its my only property that is CF neutral.  

I'm not familiar with Port St Joe, FL.  Though I've never invested in RV parks (I own some MHPs), I've been hearing its an increasingly growing asset class and feel it would be a good investment.  I feel its still early in their growth as an asset class.  I feel like most res realtors dont have experience here.  Have you contacted any CCIM's?  I get emails from one brokerage who seems to consistently market RV parks out West and sometimes in the South.  They are the NAI outdoor hospitality brokers group.  All the best!

Welcome to SC!  Happy investing :)

I hear you.  Before I start please let me say I am in a similar position to you.  First off, I wouldn't be too much of a "debbie downer" on the balloon due in 2 years.  Dont beat yourself up; many mortgages given to investors have those short 5-10 year terms especially in the case of commercial mortgages.  Unless you are a first-time homebuyer househacking or something, what were you to do?  It is what it is.

Anyways, just as interest rates are increasing so too have property values.  I know what youre thinking:  You need to refi in 2 years and are worried about the higher rates.  One consideration is property values (and rents) will continue to rise a little more also.  Of course, values and rent could also decrease.  No sense in causing yourself suffering and worry as we cant predict the future.  (But, we do know interest rates are going to rise).

One recommendation:  You could sell off 1 of your "C" properties to pay off or pay down the mortgage on that "B" class.  Even look at paying it down.  Run a few scenarios, whereby you have decreased your principle THEN refi'd the mortgage. Run various principle amounts, and various terms and amorts. That may help you see what you really will be faced with (regarding future PITI) and how your cash-flow stacks up.

It sounds like your thinking very concretely.  Why are mortgages "shaky"?  (see below, and tell me if my CF is shaky!!)  And if sell 1 of the "C" properties, why would you be "deprived of your next move for 2 and a half years"?  Who's to say you dont find an owner financed deal to get into.  I have.  Many opportunities out there, and many ways to execute (not always requiring a bank). I also want to say, I think you're putting to much thought into the bank.  I promise you, they are not strategizing against you.  You and I are not that important.  Unless your bank is an individual lender (a person).  They also won't really care whether you pay off the note, or refinance.  As long as the outcome isn't default.  Even the smaller regional banks dont pay that close attention to their loans approaching maturity.  I promise you.  Unless they hold a note for a 200-unit property of yours and you have a branch deposit account with $250k liquid funds in their institution, they're not losing sleep over you.  Trust me.

Also, who says you must use that same bank for the refi.  They are other players - this is America.

As I stated, we are similar.  My goals is also CF for FIRE.  Replacement of W2 income, to be honest.  I too have a small C-C+ multifamily property with RIDICULOUS cashflow.  And thats an understatement.  I'll give you some of the details.  I purchased 5 units for $160k and my monthly mortgage is $764/mo.  Gross rents >$3,600/mo.  Commercial note 20-year amort and term is up in 2025.  My current rate is 4.5% and yes I'm worried about my future refi when rates could (still) be higher in '25.  But, I cant complain - this property is killing it right now.  I'm not going to cause myself anguish over that future refinance.  Heck, if all else fails, I can always sell and at LEAST get what I paid for it because I bought right!  The market would have to take a severe downturn and other detrimental economic factors would have to occur to prevent that; just dont see it happening.

..oh and if the sky does fall, my option #Z is selling on terms to an investor offering owner financing (thereby having the ability to inflate the purchase price).  Boom!

Stay positive and open minded.  Opportunities abound!

Let me just say I have when insurance companies try to weasel out of risk, or out of paying.  It sounds to me like you were told it would be insured, then they backpedaled.  (can you backpedaling paying for your premium? - LOL!)  

Unfortunately, all insurances today participate in these practices.  Be in auto, home, health insurance.  They all do it.  What it gives the consumer is a false sense of security.  Yet our premiums keep going higher and higher (especially with health ins).  Ok, I digress....

Anyways, do you happen to have anything in writing from the carrier saying the home is/would be insured  the carrier?  If not, anything in writing stating roof "acceptable with 5 years estimated life"?

I want to see you fight this.  Insurance companies make ridiculous profits off denying us coverage.  Whether it be in the form of insurability (your case here) - they are essentially cherry-picking what home they want to cover to minimize their risk.  In other industries, we call this discrimination.  Or, in the form of denial of claims.  The small print exclusion stuff in their policies.  Should be illegal to do business this way, as the consumer walks around believing they are covered in case of loss.

If considering small multifamily, look at NACA for a first time homebuyer loan.