All Forum Posts by: Isaac S.

I thought the answer was that AC is not a requirement, just adequate heating.

But, according to a quick google search, I found this:

Is central air conditioning necessary to meet FHA requirements?

Central air conditioning is not necessary to meet FHA heating and cooling system guidelines. The only rule that HUD has regarding central air is that if the house has it, it must work. The appraiser is required to note what is wrong with it and how the condition affects the home's value and marketability in addition to the cost to repair it.

Read more https://birminghamappraisalblog.com/faqs/what-is-the-fha-rule-for-heating-and-cooling-systems/

listen to @Nathan Gesner

do the math!

Then continue as you had originally intended, to do the honorable thing and give him the rent discount based on the value of the work....your real win and profit is the zero vacancy while that work happened, that could have been an extra month or two of rent sacrificed before putting it on the market.

FYI, you got realllllyyyyyy lucky! The odds are never in your favor that a tenant will do good work, do it right, do it fast and do it on a reasonable budget and not have an attitude that they should be on the title.

From the work described...my guestimate would be six to ten more months at discounted rent amount, and then bump it up halfway to market for him and if he doesn't want the deal, you get full market when he moves out....

I'm not a mason, but, I do own a large brick building...at the very least, the mortar needs repointing, they scrape out the old mortar that is cracked and stuff new mortar in ....the real concern is the crack in the concrete just below where the mortar is cracking, that could be the cause of the mortar failing, if there is foundation issues.

If you are in a seismically active part of the country or a place where water can get in the crack and freeze(expand/contract) it could be an issue eventually...it's pretty small right now and pretty common issue with brick masonry in general....

You should consult a mason.

Best of luck!

BLECCCHHH!

Some idiot that was inexperienced at BRRR got in over his head(upside down) and resorted to leasing to a soberhouse operator across the street from my parents nice SFR in an affluent neighborhood....first the friends and ex-dealers come hang around the house, but, they are not allowed inside, so they all hang outside on the stoop or just down the street, if that's in front of your 80 year old parents house, too F'ing bad!!!...I hope you like smokers, because they all smoke like chimneys and have no regard for flicking butts on your property....eventually my parents went on a trip and of course the sober house people had a perfect view of them loading up their luggage, and what ya know after 25 years of not a single crime...they were burglarized, by a homeless junky ******* that was friends of one of the residents or was a previous resident....The sober house operators were ******** and not cooperative....their are more than a few of their patients were loud obnoxious gang banger types, giving the hard stares and intimidation types of attitude.

Lastly.... on more a general note... the affordable health care act made some seriously horrible changes to the way insurance can deal with addictions....it used to be that their was a limit to how many sober claims a patient could make, and then the insurance company turned off the tap....now, a patient can relapse as much as they want and the insurance has to allow them back into another sober program...it essentially incentivizes the sober programs to fail, because it assures them a steady flow of repeat customers.

Lastly, I found the few sober house operators that I came into contact with, during this time, to be vile phony insurance fraudsters and street urchins, acting like their title made them actual healthcare providers.

Just my 2c...and sincerest apologies to the 10%(if that) of the industry that are a really providing a quality and ethical service.

When you have a vacancy would you rather have it represent 50% of your cash flow or 10%?

Maslow's Hierarchy....Food, water, shelter are the basic building blocks of humanity and order, without them things like love, enlightenment, self-realization(the higher levels of the hierarchy) are much less likely to be achieved.

Not only are we involved in providing one of those basic building blocks, it does not take a genius or a ruthlessly competitive person to eventually earn a high social status(wealth) from the fruits of our labor and sacrifices.

sorry, i had to do a double take when I read the title....

if you business is literally locations, than my guess would be that locations do matter.

Jus sayn

i use

TenantBackgroundSearch dot com....get the full report $29.95....the tenant will need to log in and confirm their identity by answering some credit history questions, before they actual release the report results to you.

good luck!

Thanks to all the posters!

I guess I was not clear with my original post, the "Broker 1% origination fee" implies that I am using a professional loan broker, they are pretty large and were referred to me by another good friend, who is a RE investor.

Also, I have since spoke with my RE lawyer and accountant, who were both OK with the application deposit, and pretty much told me they were fairly standard for this size loan.

Anyway, thanks to those that added value to the thread, and sorry to kind of hijack it.

Thanks for posting!

 $4.6m loan on a est. $9M value based on rent roll and comps(sq.ft and per door, similar type, same zip)

I was planning on holding until the next up cycle in the economy, based a recession starting sometime between 2019 and 2021....I am assuming that we are in the start of it now, and with the way some are theorizing, possibly a depression. So, originally I was thinking the next good up cycle or peak would have been around 2026-2028...and now I am thinking it could be longer, so I am less intimidated by the 9.5 years of YM.

I am doing IO for first 5 years...so our cash flow is not reduced substantially and allow me some time to acquire(the purpose of the refi is to diversify our RE equity) an underperforming multi in CA, and despite rent control, be able to increase rents(via organic turnover and annual increases) without being super aggressive, and between the primary asset and the newly acquired asset, have the five years to increase the cash flows on both assets, so that when the loans(will leverage the secondary asset, too) goes to P&I we are not missing any cash flow and probably doing a bit better, despite the increased debt service.

As for the lower LTV, I am being conservative and trying not to overextend our leverage. The primary asset is fully depreciated and has very little debt, so repositioning the equity into another asset(s) is the primary goal. The lower LTV, gets me the Fannie and Freddie lenders and the great rate...the rates were in the 3.88-5%+ range as soon as the LTV gets over 55%

Because of the building location in the heart of Hollywood, CA it will continue to appreciate and is a pretty safe hold, but, because of personal family circumstances I would probably hold for 10 years, even without the refi. I just want to keep my options open and know what my exit strategy would be if I do have to disposes before the ten years.

FYI, since I did the original post, the broker sent me the lender defined YM sheet of the contract, and I will just go through and start crunching some possible scenarios, to get an idea of what kind of hit I would take...ALSO, I asked about Owner carrying a second if I a buyer assumes the first and he asked the lender who replied that it was very common for Fannie to do a supplemental second along with the assumption of the first, in this type of a scenario.

I welcome any advice or opinions...please don't hold back, I have thick skin!

Thanks and the best wealth and health to you and yours!