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All Forum Posts by: Eric Johnson

Eric Johnson has started 20 posts and replied 613 times.

Post: Unsecured Lines of Credit

Eric JohnsonPosted
  • Lender
  • Chicago, IL
  • Posts 653
  • Votes 313

Unsecured business lines were hit the hardest during COVID. Especially for business doing less than 2mm in top line.

Post: Is it too risky to cash out refy and lower my cashflow?

Eric JohnsonPosted
  • Lender
  • Chicago, IL
  • Posts 653
  • Votes 313

If you don't know exactly how to place that capital and make up for the lost returns + more, then don't do it. You don't want to pull cash-out and just do nothing with it. Otherwise, just keep your equity and make sure you do a good job at managing this rental while you figure out how exactly to park the cash-out.. 

Post: List Criteria for Acquisitions Marketing

Eric JohnsonPosted
  • Lender
  • Chicago, IL
  • Posts 653
  • Votes 313

You can't filter by commercial 5+ units? That seems to be a pretty standard criteria. 

Post: Vacation Home Loan question

Eric JohnsonPosted
  • Lender
  • Chicago, IL
  • Posts 653
  • Votes 313

Buying vacation home and using it as short term rental is two different things. If you want to use personal income to qualify and buy a "2nd home" then go for it. If you cannot, the way to do it is with an actual VRBO rental loan.. Those are 25% down based on the rents of the property and not personal income.

Post: First deal, trying to invest in multi family

Eric JohnsonPosted
  • Lender
  • Chicago, IL
  • Posts 653
  • Votes 313

No, that's not how real estate works unfortunately. Would be pretty sweet tho. If you don't want to put equity you need to bring a partner for the DP. Then again, why do they need you? Do you have experience managing, construction skills, or anything else? That's how you need to be thinking..

Post: Rate difference on 4 unit vs 5 unit

Eric JohnsonPosted
  • Lender
  • Chicago, IL
  • Posts 653
  • Votes 313

@Jonathan Farber This is actually what I advise my clients against.. If you purchase a building that's greater than 5 units and less than 10 and it isn't in a smoking good area, I would probably not look at it. A lot of these deals are too small for serious commercial players and too big for residential, since they are greater than 4 units. 

Up to 4 units you have all the dcr rental loan players available, as soon as you go 5 or more, you should have a community bank or credit union lined up to do the deal if it's something you really want to pursue.

Post: Would YOU do this deal?

Eric JohnsonPosted
  • Lender
  • Chicago, IL
  • Posts 653
  • Votes 313

This sounds like a calculator question. Not a fan of mixed use buildings that have a vacant commercial space, because those can be a pain to get a stable operating business in there that you're not consistently having issues with. The rest of your answer depends on what the building is throwing off in ROI and whether or not that's acceptable to you. We on BP cannot make that decision for you. GL my dude

Post: Financing multiple properties

Eric JohnsonPosted
  • Lender
  • Chicago, IL
  • Posts 653
  • Votes 313

@Adonis Hayes most don’t do loans under 75k at 75% ltv. Blanket loans usually start at 250k -500k loan amounts. I’d focus on single asset acquisitions

Post: Best line of credit(s)

Eric JohnsonPosted
  • Lender
  • Chicago, IL
  • Posts 653
  • Votes 313

If you are happy, then why change? You can check out local credit unions or community banks that are relationship based. That's going to be your other option. Hopping from one big bank to the next has negligible benefit.

Originally posted by @Steve Morris:
Originally posted by @Eric Johnson:

Yes, they do. Absolutely. This is another reason why student debts/loans in this country are trash.

Actually, this is why college finance departments encouraging students to get MSW degrees and spend $250K they don't have are trash.

It's like any other type of debt - It can be used for good or bad.

Designing a macro-level scam that falsely leads people to choices they have know way of knowing the outcome, and then chaining them to that obligation, when many times it doesn't deliver, is in aggregate, a bad thing. Yes, peddling higher level degrees for 100k is absolutely ridiculous. Almost borderline Guru, but I digress. 

Good luck OP.