All Forum Posts by: Greg Neuman

I'm looking at a 5 unit building and at first glance the property looks like it has good potential.  It's in need of updating and all the units are under rented.  I want to run preliminary numbers in its current state, and the rehabbed / higher rent state, so I contacted the commercial department of my local credit union.  When I asked them how they determine the value of commercial property, the response I received was as follows:

"Typically will do an income approach off of rents and expenses and also a market approach, based on what similar properties are selling for. The final value is typically somewhere between those two values."

My concern is it will be much more difficult to assume the forced appreciation value with their approach.  Has anyone else run into this?  I plan on contacting other banks / credit unions until I find one that will value the property based on income / expense approach, but wanted to see if anyone else has purchased commercial property with this appraisal method.  If so, any tips / advice?

Correct, it's an agreement that gives you equitable title.  It's not "technically" a purchase, otherwise lenders would allow you to cash out or refi (owner keeps title).  I've been told there are lenders that will recognize the agreement as a "purchase", allow you to refi to pay the owner off, and hold a longer term loan with the lender.  I have yet to find a lender though.

@Ray Thorsen No, I never did get the answers I was looking for. I called 2 attorneys, and several lenders, but none either knew or would allow the land contract to be refinanced.  My proposal would to have the land contract recorded using a title company, but didn't seem to matter.  I've talked to some people in person that seem to believe it can be done, but haven't found the right answers from a lender yet.

@Jeremy F. @Nathan Gesner  Thank you for the input and guidance.  I will definitely be using the advice provided.

I'm looking for recommendations for property management companies in the Oshkosh area.  I've seen a few recommendations for Blue Frog Property Management, but would like to connect with someone currently using them.  Specifically someone who has switched from another property management company.  I would like to know the reason why you switched, and how that has affected your rental.  I looked a little into Blue Frog and see they charge lease fees, while others do not.  Wondering if the additional fees are really worth it?  If they really are a superior property management company I would think they would be, but I don't want to end up down the same path I currently am.  Look forward to hearing your recommendations.

@Chris Mason  Thank you for the detailed explanation.  

I'm not to the point of leaving my day job yet, but am curious about refinancing when I get to that point.  Right now to refinance with a lender they require W2, taxes, pay stubs, rental income, etc.  Is it much harder to refinance if you leave your day job?  I am not planning on doing so until my income is closely matched through rental income, but would like to get information on the topic regardless.  I'm guessing / hoping the higher your rental income the  more likely the lender will approve the refinance.

@Jason Bilbrey  Thanks.  I'll also get in touch with Huntington and see what they can offer.  I'll PM you for contact info.

@Jeff Dulla  Sent a PM