All Forum Posts by: Dennis Wasilewski

Get expenses & rents then run numbers to share with the seller.

Seller wants out of an upside down situation before they start defaulting on primary mortgage?

Why would you order empty shipping containers? You buy them for cheap in US ports after delivery of goods from China. But I’m not sure building MF out of shipping containers works well, however you source them.

I’d find a good agent to help. I realized early on that a good one is worth it. You can request whatever you want. The seller may or may not comply. I received leases and expense details prior to making any sort of offer from a few different properties.

I am in PA and my understanding is the documents are mailed. I could have paid to expedite. First one so I’m sure I took the long way. 

Does your partner have an investment or 401k account they can show to demonstrate funds? When my wife & I applied individually for investment property mortgages they wouldn’t let her use funds in an account that had been paid out to me alone. So she just provided a 401k statement to satisfy the underwriter.

My personal financial situation certainly is factoring in here. Before one question about property he wanted me to give an overview of my score, debts and assets. Especially assets... despite having statements showing about double the DP they still wanted my quarterly 401k statement. Maybe the CU business mgr is a belt & suspenders kind of guy because the commercial mortgage broker I met with seemed less concerned. I also almost got into a deal with a different seller where he had a strong relationship with a community bank where they were willing to let him carry a 2nd for the DP cash. But that was going to be a portfolio of property around $375-500k... we just couldn’t find a good price.

I will throw it up on deal analysis as it seems good but not like blow-your-socks-off... would be curious of other opinions. My #s were off a 30 yr 6% rate with 25% down, conservative hold backs for vacancy, PM & maint. On PAPER it’s almost 18% cash-on-cash. But he’s giving me 6% back at close which helps.

I misspoke! I knew something sounded off. It was a debt service coverage ratio of 1.25. That is calculated as: Debt Service Coverage Ratio = Net Operating Income / Annual Debt Service The property will be titled under the LLC only. This is a long term buy & hold but I will just refinance it commercially as-needed. When I go to sell it would be just like any other commercial sale... I’m buying it from a LLC now. This would have been more about the LLC if it had been operating for two years but I’d still be guaranteeing it even then. Working it out now as a lot of options. Could be 5, 7 or 10 year term with variable or fixed rate & 20 year amortization/balloon. Another option is 20 year term with 5 year fix & variable after that. Rates prob be 5.5-7%, depending what type of option.

I think I got that right about 1.25x... but I might be off there.