All Forum Posts by: Edward B.

@Scott McGill, McGlone Mortgage Group. PM me and I will send you the contact info for the guy I worked with. I have no idea if they loan in Oregon, though.

@Scott McGill, I can't speak for One True Loan, but I did have a similar experience with an online lender. 

Last spring, my local guy was quoting 4.25%. Navy Fed said they could do 3.75%. Then I bankrate it and find a lender that said they could do 3.25%. 1% lower?! How is that even possible? They had way more than 9 reviews though so I figured I'd give them a chance. Well, they closed the loan in 60 days and it was not easy. As a REI my finances scare a lot of banks and this was a VA loan over the cap on new construction. I wound up paying 1/8th of a point to extend the rate lock since I was shopping so far in advance, but for that they extended the lock and brought cash to close!

Bottom line, it could be legit. 

@Gabrielle Deyarmond,

The pros are that you may be able to get very favorable terms from the seller and you don't have to deal with banks, which is always a plus.

The cons are that the deed stays in the seller's name until you satisfy the contract. That means that it could get attached to any judgments or leans against him, he may be able to put it up as security without you knowing about it, and/or he may be able to outright sell it out from under you. If you go this route, make certain that everything is recorded properly at the courthouse and do your due diligence on the seller to make sure they are on the up and up.

@Guevara M.,

meh, if you only have one unit it is important to keep it rented to a good tenant. At the same time, what you are doing won't be scaleable and can rapidly degrade into a situation where you are being taken advantage of, unintentionally or not. I would definitely establish some clear cut boundaries with the tenant and make sure that she understands that it is above and beyond your responsibilities and I would not make it a habit with future tenants. What happens when you no longer have the time for this? What happens when she asks for too much? You are just setting yourself up for a sticky situation. 

And regardless of the legality of it, I would not sign my fiance up for anything. This stuff is not your responsibility and it certainly isn't hers. I recommend keeping her out of it or it will get even more complicated. 

@Robert Cooper, any loan to the LLC will be at a worse rate and/or terms than a loan to you in your personal name. That is simply because they are higher risk for the lender since they are not insured by a government entity and the lender will demand to be compensated for that risk.

You can certainly do what @Brandon Calloway is proposing, I have done it myself numerous times. Just make sure that you understand the risks associated with that as well. i.e. Insurance issues, potential title insurance issues, the dreaded Due on Sale clause, refinancing issues etc. etc.

@Zach Jacob,

Eh. Dave Ramsey and real estate investor are usually like oil and water. If this guy is a millionaire that may be why he is able to make it work. For the people trying to get to that level, though, in the so called growth phase of their wealth building strategy, leverage is a powerful powerful multiplier. Yes you have to be careful with it and understand what you are doing, but personally I think you will be hamstringing yourself if you follow that strategy. Sounds like this guy got in over his head and got burned so now he is born again. I highly doubt his situation applies to you. Heed his advice, but do what is best for you and your situation.

@Vahe Ohannessian,

Ha ha! You fool! You fell victim to one of the classic blunders - the most famous of which is "never get involved in a land war in Asia" - but only slightly less well-known is this: "Never borrow from an attorney with money partners"! Ha ha ha ha ha ha ha!

Slight adaptation from The Princess Bride. Classic. 

Good luck to you, I'm sure it will work out fine. At least you are doing deals and stuff like this always comes up when you are doing deals. Part of the business.

I don't factor in a rent cushion. I have a cash flow goal for each door that should be more than enough to prevent going negative in the event something unforeseen happens. That's because my cash flow goal is after ALL expenses, including a realistic vacancy, PM whether I use one or not, allowance for repairs and capex, and debt service, etc. I also make sure that I understand the dynamics of the market that I am buying in.

@Will G.,

Rents can definitely recede for a variety of reasons, e.g. major employer leaves, over supply being built, 2008. If you buy right you should be able to weather a set back in rents. Often it will be temporary, but temporary is relative and may be longer than you want.

@Ray Loveless

You are perfectly within your right to not renew a lease on a tenant that is not living up to your expectations, especially in terms of maintaining the property. In fact, it is probably much better to let them go vice trying to enforce the new standard with them because they have already been given a pass on maintaining the property and paying market rates and so will most likely resist. Just move on.