All Forum Posts by: Isaac S.

@Brandi K. @John Blanton @Ian Plocky

Do any of you know if $10K application fee is normal? To cover appraisal, seismic, environmental. The 10k is wired directly to the lender, not to the commercial broker.

Broker Fees are 1% origination, $1500 processing...to be charged after approval/funding.

Any amount of the original 10K application fee will then cover legal fees that will probably bring the banks fees above the 10k application fee deposit, to aprox $15K in fees for all the appraisal, seismic, environmental, title, escrow, legal . THEN on top of that a funding fee of 0.1% to the bank at funding. Bank fees aprox $19k total.

Everybody I have asked has said for the amount and type of loan, pretty normal to have this many fees out the _$$ ...basically I have to pay to play.

I love the loan terms and they almost seem to good to be true, except the yield maintenance. 

Any thoughts? Advice?

Hey BP!

Hope all are well and family and loved ones, too!

My question is regarding a refi/cash out on a multi tenant with 37 units, based on rent roll and comps, my loan broker and I estimate the LTV to be conservatively at 55%, 10 year fixed 3.48, 5 years IO, non-recourse, assumable at 1%...

I love this loan for my particular situation...BUT, it has yield maintenance up through 9.5 years.

According to the loan broker, this means if I want out of the loan, in the event I want to dispose of the asset, I will be on the hook for the difference in yield the lender would get if they had the capital to lend at the rates of that future time.  It requires a formal request to the lender at that future time, at which point they determine the amount I would be liable for.

If I understand him, this is not as big of a deal if the future interest rates for the 10 year note are higher than the current .75% or close to the same amount, but, it is a potential problem if that 10 year is lower.

Am i understanding this correctly? Is their any way of determining a ballpark amount? Any other advice regarding this types of 10 year fixed balloon loans?

Thanks for any and all advice!

 I'm so sorry, but I did not coin the  phrase.

Look at my answer and the police officers reply below mine....he pretty much backed up exactly what wisdom I gave you. If you are too sensitive or I am to harsh, well that's a different story.

Clean up, re rent, disclose that your rental is a murder scene (if required by law)....that's the wisdom.

FYI, I have landlorded and lived in warzones, so I'm not judging doing either, just observing the apparent reality, again my apologies if that is to harsh or an incorrect assumption.

They don't call it "ChiRaq" for nothing!

Clean up, re-rent! Check for any state laws that require you to disclose the death to future tenants.

This will be just one of hundreds of similar incidents for the police, it is not that big of a deal to them, just make sure no preservation of crime scene is required, there will be tape and notices if so....

FYI, your property is officially in a war zone! Good luck!

OK, the lesson here is....next time if you call three service people and none of them can fix it in their initial visit, you replace the unit ASAP....hot water is essential and going for more than a few days without it, is not not acceptable. ALSO, frequently it is just cheaper to replace some appliances than try and fix them.

$350-500 for a new one, and probably like $200 install ....or pay $20-200 for parts and still probably $200-300 labor to fix...also tenants will respect your fast smooth resolution

Never, get into a situation of determining your "letter of the law"  liability with things that are obviously landlord responsibility. Just fix them fast and keep your good paying tenants happy, and their baby with warm bath water.

Also, most tenants are not having a lawyer on call, but, they are on the weaker side of the power continuum so, they say things like that because they don't really have any other play to motivate you.

Lastly, we have all made the same mistake :)

1. wood floors or wood "type" floors(aka Laminate, LVP,)

2. new nicer fixtures(not the most cheapest basic ones, but, not over the top) and new switch and outlet plate covers

3. clean fresh paint....behr swiss coffee, from home depot factory mixed so, very consistent between batches, and that makes doing spot touch ups and blend ins between tenants, very easy

4. CLEAN!!!! most people don't clean good...I mean move the refrigerator and stove out and clean under and behind them, clean on top of the ceiling fan blades, windows inside and out....clean to the level of  OCD super particular up tight tenant standards

5. then if you still have budget... kitchen and bathroom remodels, granite counters, new tub, tiles, and fixtures,etc

....um, tell them to pass to the left hand side?

@Erin Dorsey Robinson

I don't know, it kind of sounds like your are advocating to me...just sayin...

of course be pragmatic and consider turnover cost, and don't be penny smart and dollar foolish....but don't just start willy nilly handing out blanket discounts....you need the capable ones to cover the incapable, and if you start blatantly discounting across the board, why wouldn't you reward the good payers too?

lastly, I can tell you from direct personal experience, the majority of your tenants would be totally OK with making you bankrupt and homeless for the amount of 6-12 months rent, some might even feel bad, but still take the money, and a few would get a sadistic pleasure from it. Of course, this is more accurate with more total tenants. For those withe less than 10 units, you may actually be loved and cherished for your kind benevolent ways! Heck you may even get a Xmas card!

Good luck! 

Wherever there is blood in the streets, even if it your own!