All Forum Posts by: Dominic Mazzarella

Being creative can take you so far in this space. Good move. And yes I would do the same. Worst case scenario you might overpay in financing for a bit but there's always the chance to sell or refi in the near future. I say this without knowing all the details of your deal. I'm assuming it's a good one and worth the trouble.

Exactly , looking back the 5% isnt so bad haha

Oh in hindsight it was a fantastic move for sure!

1 Vote

Quote from @Varun Chawla:

The insurance is very cheap at 10-15 a month and says it covers up till 10k. Although, I am concerned this may be one of those things that never pays out, so wanted to see what other people who have used it have to say about it

Interesting. 10k will only go so far if it's a private system for certain property types. And I get your concern about them never paying. Definitely read the fine print.

1 Vote

Kansas City, Missouri

Quote from @Michael Lipsey:

Hey everyone!

I was curious if there was anyone in the local area that has any experience with storage unit investing? I am eager to find my first deal and get started. There are a few on market deals right now.

Do you want a local deal because you want to be close by to do the management yourself? If not, I'd say just look for a good deal further from you. There could be some homeruns in another state or other TX city that beat your local plays.

But I definitely understand if you want to do the management yourself to save money. I've owned self-storage and it's a great business to get into.

0 Votes

Austin, Texas

Quote from @Devin James:

In Q1 of 2022, when interest rates were rising, our future primary residence came on the market.

The seller wanted cash or seller financing at 4.5% interest, but we couldn’t pay cash.

I realized that to win the deal, we needed to make it more attractive to him.

So I offered 5% interest—which, at the time, felt crazy because just 4 months earlier, rates were around 3%.

But the deal still worked well long-term, and after talking with the seller, it became clear that he actually preferred financing over cash.

Deal-making is about structuring terms that make sense for both sides.

Would you have done the same?

2 Votes

Quote from @Scott Suryan:

I have a property that I am in the final stages of title work that I will be buying. It is a 2/1 in in a "C" neighborhood. The cash price is $58K. The tenants are long term and they have no desire to move anywhere else. They are willing to sign a two year lease and go from $950 to $1050 a month and they pay all utilities. The inspection came back with fixes but nothing that is immediate and can be done over time nothing needed immediately that is more than a couple of thousand dollars in all.
My dilemma is do I pay cash and have a property owned free and clear that is kicking off almost $500 a month in free cash flow (after reserves for maintenance and cap ex and taxes/ insurance are taken out too) or do I use the HELOC and save my cash? HELOC rate is 8.99%. I have more room in the HELOC for other REI down payments etc.
I am leaning toward paying cash but want to know if I am missing something. Thank you for your feedback.

Scott Suryan

One way to look at this would be to ask, what kind of return can you make that cash? If you put it into the stock market and it nets 12%, or put it into this RE deal and it gets you 14% IRR, then it makes sense to use the HELOC. If you think you can't beat 8.99%(which is pretty high honestly), then use cash.

You should also consider leverage, if you use cash, can you then get into another deal? If you use the HELOC and cash, can you get into two deals?

0 Votes

Detroit, Michigan

Quote from @Varun Chawla:

Hey everyone, wondering if any of you carry sewer line insurance and if so, do you go with HomeServe or another provider?

I recently had a property with a sewer line issue despite getting a good scope during inspection. Turns out there are some low spots, and now I’m dealing with costly repairs. The realtor recommended a fix, but it’s expensive.

Looking back, I’m wondering if I should have taken the insurance. Anyone have experience with these policies—do they actually cover the big-ticket repairs, or is it just another unnecessary expense? Appreciate any insights!

Wow I had no idea that sewer insurance was a thing. That could have saved me some serious money on a few deals. It’s one of those expenses that feels unnecessary until you’re hit with a big repair bill.

Do you mind telling us how much the quote for the insurance was? I know sewer line issues can get expensive fast.

Sorry to hear that you're dealing with these expenses, I know exactly how that feels.

0 Votes

Kansas City, Missouri

I think a lot of folks are waiting for interest rates to drop before moving forward with a house purchase. And I don't blame them honestly.

0 Votes

Quote from @Kimberley Smith:

Hey everyone!
Wanted to open up a conversation and share a few insights I’ve picked up working alongside wholesalers and flippers here in North Carolina.
One of the patterns I’ve noticed: deals tend to move faster when there’s better communication between all parties involved (wholesalers, agents, contractors, lenders, etc.).

Curious—what’s your experience been working with teams in your market?
What do you think makes a deal process smooth vs chaotic?

Always looking to exchange ideas and learn from fellow investors!

That's a solid observation you've made about better communication. When I came over to CRE investing full time from personal finance, I was blown away by how poorly many people seem to communicate in this space. I think there's just a lot of folks that don't necessarily need to make things happen right away and so they take their time with communications. And that's totally fine, it just took me some time to adapt. Now, if a potential partner or broker doesn't respond to me for a few days, I don't really sweat it. That's just kind of how things run in this business.

Being amenable to other people's communication style is what's helped me out a lot. Also tracking conversations so I don't miss anything.

1 Vote

Raleigh, North Carolina

Quote from @Kilian E Peterdy:

Investment Info:

Mobile home commercial investment investment.

Purchase price: $725,000
Cash invested: $550,000

82 UNIT Mobile Home Park
Purchase price 725K
Down Payment 350k
Capex 200k
Funds to raise 550k
Seller finance 4.75%
3 Yr balloon

What made you interested in investing in this type of deal?

Seeking private lenders to fund

How did you find this deal and how did you negotiate it?

On market

How did you finance this deal?

Private

How did you add value to the deal?

NOI/CAP

Mind if I ask specifically what the 200k capex is for? Also, has the contract already been signed with these seller financing terms? The rate isn't bad at all, but a 3 year balloon and a 50% down payment isn't really common. I don't know, I'd be a little nervous about being trapped here. I've heard of nefarious sellers who use terms like these to get someone to sign a contract, knowing that there is a small likelihood that the property gets sold or refinanced in 3 years and then they get to repossess the property.

I'm not saying at all that this is what that is, but how are they justifying these terms exactly? I would be cautious.

2 Votes

Quote from @Frank Nguyen:

If you made several attempts to contact his current landlord reference and they did not answer is this a valid reason to deny his application. Do you need to tell him prior to denying his application that his current reference did not answer or can you deny right away?

If the applicant has a strong odor of weed and you can't verify rental history because the reference won't respond, you’re well within your rights to deny the application. You don’t need to explain why unless local laws require it. Just say they didn’t meet your screening criteria. It’s not about the smell alone, if they check every other box and meet your standards, that’s a judgment call. But if rental history is a required factor and you can’t verify it, that’s a valid reason to move on.

You don't want to be in a position where you regret taking this person on as a tenant.

1 Vote

All Forum Posts by: Dominic Mazzarella

Dominic Mazzarella has started 7 posts and replied 246 times.

Post: I Negotiated to Pay a Higher Interest Rate on My Home

Post: Question About Sewer Line Insurance – Worth It?

Post: Storage Unit Investments

Post: I Negotiated to Pay a Higher Interest Rate on My Home

Post: Pay cash or use HELOC

Post: Question About Sewer Line Insurance – Worth It?

Post: Biden Recession Has Been Called Off - Go Buy A House

Post: Lessons From Working Closely With NC Wholesalers & Flippers

Post: Seller finance MHP

Post: Applicant smells like weed