All Forum Posts by: Eric Johnson

Why do you need non-recourse? It doesn't really make a difference in deal structure unless you have partners or are syndicating a large deal with external investors. They are usually on multifamily buildings $1mm or blanket loans across multiple 1-4 unit properties.

Alvin is correct. Focus on doing 1 deal at a time. If there was a way to "circumvent" rules, they wouldn't apply and everyone would be doing them. 

Your DTI will also continue to be out of whack, assuming you have enough personal income to qualify for 10 properties.

Hello Robert, 

I agree with @Will Fraser. Start with a commercial loan to help you scale.

Michael, it depends on your strategy. If your goal is to fix and sell a property, then it would be rehab loan. If you can qualify conventional to get a rental property, then that's what you would use. Banks & traditional lenders don't lend on fix and flips. There are different uses and contexts for each method of financing.

@Justin Goodin that's great, but there's no context here on BP, I don't even know what skill set OP has. That being said, not all people need or want to scale to multifamily. It depends on your goals as an investor. Sure, I'm not saying don't to big things, but realistically, if you can't even rehab a 3.2 1,200 SF bungalow right, then there won't be any magic success.

Success and more specifically, execution is determined by the underlying principles one sets into motion & having a high level understanding of the craft/strategy being executed upon. 

Hope this clarifies my point.

I recommend not to buy sight unseen. If you're new, how do you know your agent and contractor are trustworthy? Even if they are, people make mistakes that cost you money. You should know the whole process inside and out. To be a project manager, you need to direct your parties what to do, you cannot have your agent or contractor telling you what to do. 

Go to the area and become familiar. Spend at least a couple days there. After all, you'll be holding the investment for multiple years, so is it not worth the time to do it carefully?

Create a new LLC for every 2 or 3 houses, so you limit risk exposure. Each LLC will have an operating account.

I use AZLO (a subsidiary of BBVA) as they are free, 100% online (with physical ATM accessibility). Do not use a bank that has any service or maintenance fees. They frequently do because its a business account and its just another BS way to charge you.

This is a question for your local professionals. Call up 5 agents and 5 lenders and ask 

203K financing? 

Yes, do a HELOC and make sure you have a clear strategy on repayment & what that timeline looks like (IE don't pull a HELOC and not know how to get rid of it).