All Forum Posts by: David Moore

All,

I work with a portfolio lender in the Twin Cities that will finance 80% LTV, up to 25 year amortization. I've financed properties in Southern Minnesota with them as well. PM me for the info and contact.

I have a portfolio lender that will go 20% down.  PM me for the info.  

Minnesota state law says exactly what @Dan Vleck says.  Your own lease may say different, though.  

@David Barnett

Do they do good work, as in find good tenants, and manage the place for a reasonable fee?  I"m on the lookout for one as well.

@Milind Shastri

Lost in all this discussion, and sorry to anyone who has posted this, and I missed it...how do you know $335K is not a bargain already?  You need to do due dilligence, and get out of the value buyer mentality.  If the seller is asking $335K and the property at that price is cash flowing, say, all in, $300.00 per door, that may be awfully good, and will form the basis for a swift rejection of your offer.   If the property keeps putting money in their pocket, and their cash flow is good, why should they sell at a discount.

Have you done any market analysis of the immediate area?  Is it growing?  Is it an A, B, or C level property?  Is the general real estate market booming in your area of Dallas?  Now, I've heard Dallas is boomtown, but it is a legit question.  What is the cap rate at the list price, versus the  cap rate at your price?  What is common for your area...is a 7 cap common, or 6?

Is there a lease loss angle you can work?  Are leases in a 2.5, and 5.0 square mile radius 10, or 20 percent higher for the same basic features?  There are several good sites to help you with rent estimates (just PM me for a good one).  

Use the bias of every other investor to your advantage. If most investors are looking for a discount, find terms under which you can give the seller the price he/she wants, but at terms that also benefit you. Look for a win/win. The fact that you are FHA financing works against you strongly. You are not in position to bargain. You may need to pay full price.

Lastly, it is a terrible sign that this RE agent is pawning you off on his/her secretary. Find your local REIA, attend a meeting, and find a realtor who is also an investor. And most RE agents are what I would call, not motivated. The guy I use, a BP member, is an investor, and is great. However, if you find one who will sign you to a non-exclusive contract, chances are you've found one who knows something.

@Ericka G.

I just wanted to congratulate you on a job well done.  You and your husband own cash flowing, paid for properties.  You are doing this without lenders.  One thought on this.  There are lenders out there that are not insane, and will loan to you.  Your problem is likely that since you use cash so well (kudos!), your credit history is impacted.  While your credit score is good, your credit history could be so lacking due to not having debts to pay off on a monthly basis.

But a portfolio lender will look at your situation differently.  The big banks are kind of plodding and rigid, because that's the way they have to operate....but they have their uses too.  Look for a local bank, and then show them a 'brag' book.  Show them pictures of your paid off properties.  Also tell them you will move your checking accounts over to them, and park your rent cash in their accounts.

The portfolio lender will then be open to lending to you. Each one of your existing properties are an ATM waiting to be used. You could get HELOC's on them, and not pay huge costs for financing as a cash out refinance. A Heloc is like money on demand. When you need it, you borrow, and then you pay it back, it is ready for use again.

Unused equity is sunk money.  It is an opportunity not being utilized.  But, give yourself a break....I think you are doing great.

@Account Closed

I suspect that is exactly the case, and it strikes me as a cheat.  Appraise it accurately, instead of taking the easy path.  

I own 4 SFR in Albert Lea, MN, and a four plex in Crystal, MN. On the 4 plex, we paid $295K in early 2016, and focused on lease loss as the primary value add. Since purchasing, we've raised rents $200.00 each unit, and now the building cash flows about $300.00 a door. My rents are still $150.00 below market. I am buy and hold oriented, but I want to try a flip, as I have most of my team ready. Houses in Crystal are so poorly presented when sold, that I'm itching to find a few and put some $$ in and flip. The City of Crystal is a far cry from Minneapolis. Far less apartments, and the goverment is pretty reasonable.

@Matt Higgins

Wow, I'm impressed, Matt.  Want to share about the project?  

Yes, it was nearly identical, but had no garage.  It was rehabbed, similarly to mine, has the same size units.  It was a 4 unit building.