All Forum Posts by: Joel Florek

Hello Fellow BPers,

Currently I am looking at expanding my investing to a larger market. In particular I am interested in the Fox Valley area of Wisconsin. Particularly Green Bay to Oshkosh so Appleton, Neenah, De Pere, Menasha, Kaukauna, Little Chute, Kimberly (trying to make sure I get hit on people keywords) are all towns I am interested in.

I am currently investing in Iron Mountain and have 20 units between two buildings. 

Being that I will be new to investing in the area I will have a lot to learn about the region prior to pulling the trigger on anything. What peaks my interest is the higher population, population and job growth, investment into the area from the State of Wisconsin, and the fact that it is only a 2 to 3 hour drive from where I am currently located so day trips are still very reasonable. In general I like the area and always have, plus who couldn't love cheese curds and Spotted Cow!

If your an investor in the area I would love to connect and start to learn from the locals about the lay of the land, amenities requested by tenants, and any unique market trends in that area.

Thanks all!

Joel

@Sherri D. Is this a conventional loan or commercial loan(if 5 to 10 units I am guessing commercial)? With commercial loans it typically depends on the lender you are using as they have a lot of flexibility to work with you. The better performing the asset the more likely you can work outside of the normal bounds set. I have two local banks in my town who are the primary commercial lenders and one is more aggressive then the other bank. With that said, I would urge you to understand the capacity to lend for each bank. You need to find a bank large enough to have plenty of capital to work with but one small enough that they will evaluate their loans based on your ability to manage the property and the assets unique characteristics.

@Jean-francois Ndomb Another option to look at is a commercial loan. If you can bring in private financing to keep the banks LTV at 75% or less and show that the property will cash flow with all expenses accounted for then you should be in good shape. Unfortunately you will be likely subject to a balloon, slightly higher interest rate(around 5%) and an amortization around 15 to 20 years. But with private financing combined with the bank you could get in with no money down and not get hit with the PMI. You will also likely close significantly faster by going this route.

@Courtney Merricks Thanks for the kind words! Ive got my new list of properties I am after and hopefully I can close another similar sized deal this calendar year! 

@Mike Henkel Congrats on your success! I didnt get started as early as you, but got going the past year at age 22 and am at 20 units now for 38 bedrooms and $875k market value. For organization I just got my property management database set up and I cant imagine trying to keep track of the property without it. I am using Podio and absolutely love it as the basic version is free and it is completely customizable. There are a ton of add ons that you can use to connect to all your other applications that you might be using like Gmail quickbooks, or dropbox. 

@Hugo Castellanos Add me as a colleague and we can chat through the inbox feature. 

@Ben Lempo Thanks for the kind words. I have a few inspirational videos that I listen to every morning to help get be excited for the day and I like to read inspirational articles on motivation and success periodically throughout the day to keep the momentum going. Its important to have things like that in our lives and for you to say that about my story means a lot. Let me know if I can ever help or if you want someone to bounce ideas off of. 

@Michaux Hyatt @Lisa B. @Brandon Gentile @Chad Olsen @Edson Reyes @Mateo Carrera @David Bohner @Kathlene Griffiths @Blair Knowles Thanks all for your posts and being part of the BP community! Seeing the huge support is exciting and will continue to share details on my deals and how I develop my business systems as I continue on this adventure.

@Nilesh Patel Yes I had to sign a personal guarantee. I am confident in my numbers and my ability to grind to keep my business alive if things get tough. If I am not willing to put my name against my loans then I believe that is the biggest contradiction an I can make. Thats saying "hey this is a great deal, you(bank) put up most of the money, and if I fail you are on your own because I dont want to sign a personal guarantee." With that being said I am taking on a large amount of risk that if there were some terrible things that happened I could be left paying back my mistakes for a large portion of my life. But I accept that responsibility whole heartedly. Other investors may disagree with me on how I feel about the personal guarantees.

With that being said I dont believe these current properties to be speculative. If I were making a speculative investment, I would make sure my lenders understood that and would seek to avoid signing a personal guarantee. However, I would very likely end up paying a much higher interest rate for my lenders to offset their risks. I am not in real estate to screw anyone. If I do a deal I want to be sure that everyone clearly understands the deal and if all can meet the major goals they have then we can close the deal. 

@Tom Tippmann Thanks for post!