All Forum Posts by: Steve Wilmers

Daniel-

From a "timing the market" perspective, I'd rely more heavily on the specific location you're looking to buy in.  In addition, depends on how leveraged you are in each of the properties. 

If there's a substantial amount of new units coming online in the same neighborhood that you think could oversaturate the market here in the near future, I would wait and see how existing units do once the new properties come on-line.  Total demand likely won't diminish, but in your analysis I would see how it looks if you have to cut your rental rate 10-15% both on your new property and the existing units.

The reason I bring up the new construction is because that is what's happening here in our market.  New construction is causing some existing units that have had great rental history to appear outdated, and while I haven't seen significant rental reductions in existing units, there are still many new units coming available.

Ryan - Owner occupancy clauses are typically 1 year requirements. 

Hi Trottie - typically I'll just search the address on the website of the municipality that the property is located in.  The county website has been the most consistent for me. 

As for finding the person, Facebook/LinkedIn would be my first guess.

Hi John,

Not sure I can be a huge help, but here are my thoughts for what it's worth:

- Return doesn't seem bad, but really depends on maintenance costs.  Could be high with the older building.  Any idea what this has been historically for the current owner?

- Any knowledge of the mattress company's financial condition?  Are they a big shop or smaller mom & pop? If I was in your position, it would be worth it to me to offer a small discount for your first year in if they would let you look at some financial statements prior to purchase.

Amitabh,

I've never seen two properties under one residential loan, but that's not to say it hasn't been done. On the commercial side, its common for one loan to be supported by a portfolio of properties.

I'd trust Harjeet's response above regarding the down payment specifics on the residential side. My experience is mostly on the commercial side, but I've been told 25% on the multi-units as well. 

Best of luck!

Hi Amitabh,

Requirements will vary depending on the bank, but I'd expect a typical bank to require a 20-25% down payment, and the loan will probably be set on a 5 or 7 year term with a 15 to 20 year amortization.  This differs from your personal mortgage in that your mortgage is likely a fixed rate for the entire repayment of the loan.  On a commercial note, the bank is only committing to you for 5 years of the potential 20 year repayment period.  After this 5 year period, you (and the property) will need to be re-approved by the bank.

What type of property is it?  Multi-family?  If it is a 1-4 unit residential property, you may be able to work with a residential lender and just call it an investment property.  I would attempt to go this route first, as it saves a significant amount of hassle compared to a commercial loan, and you would then be able to fix the rate over the 30 year period instead of just a portion of the note.

Regarding the capability of future residential mortgages, yes it will have an effect.  Your Debt/Income ratio will reflect the new loan.  After a couple of years, the income from the property will also be included in this ratio calculation.

Which area/lake are you looking at?  I'm not much help on the exact occupancy during the summer months, although if it's in decent shape and on one of the higher traffic lakes I don't see a reason it wouldn't be full from Memorial day through Labor Day.

Regarding the off-season rates: If there's a decent rental (especially on a lake), even if it's mid-winter I am willing to pay close to typical hotel rates in the area.  Again, dependent on the location you're looking at.

Thanks for the heads up Ronda!  I noticed that not all areas in the map in my area are included in the analysis.  Some areas still show up grey instead of the light yellow to red hue.

To compliment the realtor tool, i'm a fan of crimemapping.com, which works great once you've narrowed your search.  The website will even send daily notifications to your email for a specific address and surrounding radius.

Has anyone had experience with these cabinets?  From what I have read, the prices fall between an Ikea and a typical semi-custom cabinet line.

Welcome @Ryan Lott!