All Forum Posts by: Herman Herrera

Hey everyone. A little background first. I own 19 units (commercial, residential, STRs,) and I’m looking to continue to diversify my real estate portfolio with student housing. My current portfolio is valued around $6m and I owe around $2m. All different lenders mostly from Wells and Chase as well as some private notes.

I’m looking to purchase 12 units (student housing) at a value of about $1m. I have $200k on hand to invest.

Here’s my question. Can I accomplish this by leveraging my equity and not using any of my money?

Would this be in the form of cross collaterizing my current portfolio with a single lender? Or should I just use my cash and go conventional.

Sound advice is greatly appreciated. Thank you.

@Austin Hair it’s illegal in New York State.

@Mark Doty Hey Mark. Not sure if this applies to you in California but I can tell you what I went through here in NYC. I recently purchased a commercial property for $980k. I was able to owner occupy the space (I moved my office there) and get away with 25% down instead of 30%, which was the minimum requirement. I used Investor’s Bank and wound up with a 5.25% 7/12 rate (locked for 7yrs and callable in 12yrs). I own about $4m in additional real estate which did come into play during the application process. So total out of pocket for me was $277,000 as follows: $245,000 (25% down payment) $32,000 (closing costs...mainly mortgage tax and title) And my payment is $5,804 per month with taxes. I have 7 tenants in the building that help me cover that. The loan parameters for commercial properties are the same for multi unit properties here in NYC. Though assets and credit did come into play, your NOI needs to cover the mortgage with a certain vacancy rate. Lenders will vary. I suggest shopping around. I went to several banks and private lenders before choosing Investor’s Bank. Good luck.

Yes 1.5 months security is legal in NJ. First and last is also legal.

Keep your moves silent. Your money invested. Your life low key.

It's not part of inspections here in NY. And I would recommend a camera inspection by a licensed plumber. Read this nightmare... http://www.silive.com/news/index.ssf/2009/01/staten_island_woman_sues_over.html

As Pratik P. mentioned, honesty and sincerity are key. When we hit expired's and FSBO's, I like to follow up with a handwritten note...then another call.

You only go around once. If you don't enjoy your wealth...your heirs will. That being said, I'm a huge fan of Dave Ramsey (minus the religion). Get to a point in life where everything is paid for. And you have a very comfortable, passive income coming in where you can help family, give back to your community, and you can lead a luxurious lifestyle...why wouldn't you?

In NY, we sometimes use "dual agency with a designated agent" meaning that the listing broker would still get both sides of the commission but another agent in the office would represent the buyer to avoid any fiduciary conflicts. Not sure what you're going to negotiate, if the properties are already listed, it means the sellers signed listing agreements. Why would a listing broker agree to cutting their commission in half when they already have a signed agreement? Did you approached the listing broker to see the property? The seller? Does the seller have an exclusive agency agreement with the listing broker or an exclusive right to sell agreement?

Depends on your income. Your children could qualify for Child Health Plus from NYS. And your costs could be subsidized through the affordable care act. I know someone (self employed) who's adjusted gross income is about $65k per year and she said she pays about $700 per month for her and her husband. Her kids are covered with Child health plus for under $100 for both. So a family of 4 for around $800. Not bad. Now if your income is high, you're going to pay more.