All Forum Posts by: Dustin Lauer

@Jason Utley  Do you have long term financing, and can you send me a message with your email address?  

@Scott Taylor yes it is totally possible to get a commercial loan on a residential 3 unit property.  @Timothy Maloney is correct that is does not matter the asset for the loan type.  In fact, a pretty high percentage of residential investment property loans are considered to be "commercial loans."    I also, am a Lender, and I've noticed I finance about 75% of purchase deals on cash contracts without financing contingencies.   So it definitely appears to me that sellers and seller's agents do far less diligence to find out if a Buyer really has the cash, than they look into a Buyer's ability to get financing.  (*** I am not advocating to not disclose or improperly disclose financing on a contracts, but it good to know that Sellers seem to disproportionately weigh a Buyer's ability to get financing than they do a "Cash" Buyers  ability to actually pay cash).

Cool.  I can't think of any recommendations in LA, but I am confident you'll find some companies that do what you are looking for. 

Sounds like your making some smart considerations figuring out your prepayment penalties and your upfront point together when factoring your financing costs. (Especially if you plan to resell in a fee years after your acquisition).  I think too many investors care about the rate or worse yet their monthly costs, but not their overall bottom line.

@Henry Chen where do you invest?  Do you often sell within a few years and have pre-payment concerns?

I mostly do small residential non-recourse loans 1-4 units, but unfortunately not in the North East, where that seems be more difficult to get.  If you find some one please post who on this threat.  Thanks.

@Joseph Weisenbloom  I think it really depends on a lot of factors.  For example your purchase and refinance LTVs, closing costs with each lender, rates and loan programs changing by the time you refinance (your time table), pre-payment penalties, and whether or not your rehabbing these prior to renting them out...  Your plan seems sound I think as much as you can get conventional and fixed makes sense to me.  

@Dustin Beam also if you're considering buying rentals were 10% fully amortized for 30 years does not cash flow, at 70% LTV, I would suggest reconsidering those acquisitions for higher yielding properties.

@Dustin Beam They are less scary now because most lender have annual caps on the % they can rise, and before 2008 this was out of control. People took loans they could never have afforded after just a few years of teaser low rates. These days rates are so low in general, if your best option is an ARM you can at least save as much as possible for a few years while it's fixed and then figure out an exit or see if your new payments would still make sense with your adjusted ARMs. Another detail I would look out for is the ability to make partial payments without penalties. If rates do rise, it's nice to be able to pay off what you can without penalty as a way to figure things out... Also this part is really just my opinion (and I'm no economics professor lol) but I personally think we won't see much for rate increases. Central Banks have most major nations in tremendous and unprecedentedly high national debts. We're set up to cross $20T in the U.S. before the next president takes office (politics aside). With this massive amount of debt, high rates are mathematically unsustainable so I see little incentive for central banks to take nations into default by increasing rates drastically. (IMHO).

I've seen some investors do well (better than traditional long term rentals) in net numbers with Vacation Rentals, but its a balancing act, and I think it works at a certain scale and in certain markets for sure.  I agree gross figures don't matter and vacation rentals are wrongly attractive to investors based on those numbers.    If you have one vacation rental things can be a challenge, but if you have several then you can afford to have a good handy-man on call for quick maintenance on short notice, and a good cleaning person before/after short term tenants.  Cleaning crews at hotels make sense because they work hourly and can clean lots of rooms, and the same principle hold true for vacation rentals.  You cannot as easily pay $80 per house cleaning (2 hours = $40 hr) as you can afford to keep a cleaning service contracted for up to 20 cleans a month for 5 houses for less $ per house, or paid hourly if you have enough property...     Some of the other plus's are 3rd party insurances, constant knowledge of the conditions of your properties, and constant and greatly diversified sources of income per property (lot of tenants paying in advance for their stays).  Nashville, TN and Orlando, FL are 2 markets where I've seen investors do pretty well with them (in net numbers).