All Forum Posts by: Jon Reed

Lets start of with some more details...

What kind of property is it? How many units? What price point?

If you are getting a commercial loan on it then you are going to be hard pressed to find anyone doing 30yr fixed rates. With rates this low almost every commercial lender I have chatted with are doing either variable rates or very short term fixed rates.

Also, not related to your question. You may want to think twice before buying one property and relying on it for your sole source of income and leaving your day job. For one, you are putting all your eggs in one basket which is not a wise move. Two, you will have a horrible time trying to get a loan for a few years if your only source of income is this one rental property. Most lenders want to see at least two years of income history.

There are tons of apps out there than you can purchase which do exactly what you are wanting to do. Give it a quick Google and you will find everything your heart desires.

For example, deal machine is one of them.

It will all depend on the bank you talk with. However, you shouldn't care about finding a bank who would lend on it because you will killed KILLED on the appraisal of the property. The appraiser is going to see an unfinished house and appraise it as such which will really cut down on the amount of cash you can take out on it.

Are you sure the term 'sell' is what you are looking for? Selling usually involves some kind of monetary transaction along with a bunch of title work.

You can just go talk to a closing company and have them file the title work to transfer it from one LLC name to another without having to do an actual 'sell'.

You should talk with an attorney. Going in together on a property with someone is a big risk with countless possible outcomes. You will need an attorney to help you line upfront what you both will do in various scenarios. For example, have you thought about what happens if one of you dies? What if the person who put in more equity wants to sell the property in a year and the one who has less equity doesn't? Is it a 50/50 split of decision making authority or just expenses? What if one of you hits someone with your car and gets dragged through a lawsuit... can they come after this property since it is an asset for that person?

How many banks have you talked with? Were they nation wide banks or local banks? 

Starting out is hard and you may have to talk to 20-30 different banks and sometimes even different lenders within a bank before you find someone who will give you the light of day. Don't get discourage, keep at it.

Welcome to Real Estate! 

How many people have you called, emailed, texted, direct messaged, or tagged in a post in the past week? You need to be the active one trying to find a person and then be ready to offer them something that makes their life easier/better. Because offering advice/mentoring is a time suck/investment so the mentor needs to have a return. 

This is probably one of the top questions I read on the forum. 

Finding a Mentor = Defining Your Skill Set

You need to figure out what you have to offer and then put yourself out there and offer that service/skill for free in exchange for someone's knowledge in the field. 

You should start with running some numbers. If you are only looking to make a profit then converting a residential property to a government based housing is probably not the most lucrative adventure to go into. Do some research and figure out what your long term goals are. If it is just to make a bunch of money then there are many better routes to go down instead of government housing. 

However, if your heart is going out to people in hard spots and are needing opportunities to turn their life around then look into the programs out there that could help you achieve that goal.

You will RARELY find a bank who will loan to an LLC without making at least one owner a guarantor on the loan. It would be one of the stupidest decisions for a bank to loan to just an LLC. Think about it... You create an LLC and purchase $500,000 in real estate with it. The market flips and home values and rents drop. You file bankruptcy and are done with it... now the bank is solely on the line holding half a million dollars in bad real estate. That is a risk that no bank wants. They want to see that you are confident enough to put your own name on the line and not just an LLC which can easily be closed up without any negative consequences to the owner.