All Forum Posts by: David J.

I am under contract to buy a single commercial office unit with an existing tenant.

The closing is scheduled for eight days from now. My financing contingency expires in five days. The offer way made and accepted two months ago, feels like a lifetime. The numbers are fine, not spectacular but I felt good at the time.

The financing is not yet final as I haven't yet gotten insurance. I have a quote in hand but haven't paid for it yet.

I am having major second thoughts about this property considering the current state of the economy.

Cities are passing laws that tenants can't be evicted for non-payment of rents. Businesses are losing money with no business.

Will the existing tenant be able to continue doing business? Will the real estate market crash over the next six months? Am I overpaying? Do I want to tie up the 25% down payment and commit to a loan at 5.25% for the foreseeable future when I might want that money for better investments? Or to live on if I lose my day job?

The only way I can see backing out without losing my 10% earnest money is to use the financing contingency. If I don't buy the insurance then the lender won't approve.if I don't pursue the insurance, i.e. pay for it, could i use the lender's denial?

Will this strategy work? Should I pull the plug?

I'm made an offer on my first commercial property. Small condo office space. Sale price is $300K.

I'm looking for financing and my bank says they could need up to 60 days to get financing approved. 45 days to rush, maybe less but it might cost extra for the appraiser to do it faster.

So we asked for 65 days to close, a discounted sale price, with 3% earnest.

The seller came back with a counter price and with 1/2 of the earnest 3% money being non-refundable after 25 days (the inspection period).

I'm not super happy about the non-refundable earnest money portion. If financing doesn't come through and I want to back out, I'll lose it, right? Is this a bad idea?

What is the rationale for not accepting payments from a third party?

I'm a new investor. I recently sold a business and have enough cash that I can buy (and repair) a property without financing. I like the advantage of making a cash offer, plus being able to fixes without following bank rules. I also like leverage and low interest rates. 

So I want to buy a 2 unit rental property with cash, then take out a mortgage. Is this a reasonable strategy? What sort of rate should I expect? As a result of the sale of my company, I have gone from low six figure W-2 income to mid-six figure investment income. Will this affect my mortgage application?

A shame? Not really. Back in the early 80s inflation was at 14%! To get a "real rate of return" on a savings account, you've got to take the offered rate and subtract inflation. If a savings account is offering 10% (as some did in the 1980s) that sounds amazing, but if you subtract an inflation rate of 10%, you're making 0 in real dollars. Today, you can get 1% (if you're lucky) and inflation is hovering around 0%, so at 1% over inflation, it's actually a better deal than in 1980.

"Being liquid" and "having low risk" are valuable elements of an investment. You pay for those by having a low "rate of return".

Hello! My name is David. I'm 40 years old and live in Santa Fe, NM. I've been lurking around here for a few months, listening to some of Josh and Brandon's podcasts, checking out the Beginner's Guide, reading some threads. I've also set up a couple keyword alerts. I thought it was time I'd come out in the open.

I'm looking to generate cash flow while to holding properties to 10+ years, on the road to wealth with the goal of limiting the amount of time I'm working. Though I like working.

I understand business in general, have a good understanding of basic finance and accounting and the math behind it. I have excellent credit and access to cash if need be. I'm not the worlds greatest people person and I'm concerned about taking on another responsibility in addition to my other business and family.

I don't think I'm interested in flipping. I don't know much about building and flipping seems like intense amounts of time followed by calm. I'd prefer a more even distribution of commitment. I'm not interested in wholesaling. I don't understand it, and it sounds like a lot of "sales" type work. I'm not an extrovert.

For real estate, since I'm new, so I feel like I should start small: single-family, duplexes, or small commercial buildings until I understand the business. I'd prefer Santa Fe, but it seems like the pickings are slim here and would consider Albuquerque (about a 45 minute drive away).

I haven't done much except look at Zillow and do drive bys around town. I guess I'm looking for local networking and for advice about specific issues. I have various specific questions that I'll post over time.

See you around!
David