All Forum Posts by: Joshua Fulenwider

@Seetha G sending along a pre-approval letter can only help but isn't necessarily a requirement.  At least not in my experience.  It does show the buyer that you are serious.

Loans are typically evaluated solely on the deal itself.  However, we typically require someone to be guaranteeing the note and that person should have the ability to either make the payments or be worth enough money that they an liquidate assets to pay off the bank's interest.  Each deal is different, each bank's requirements are different, and each lender is going to approach it from a different perspective.  Will you need additional funds? Maybe.  Start talking with lenders as you put the deal together in order to find one that fits your situation.

I know a lot of people get started in investing doing exactly this.  Do mortgage companies like it?  Not particularly.  Can they or will they do anything about it? Probably not.

@Eric DeVito and @Donnie Patel I think you are both on the right track.  I've bought some smaller multi-family places and a couple SFHs.  They just aren't worth the headache of procuring financing and doing due diligence when you may only be netting $100/mo.  I've been looking as well and have participated in some syndication deals.  

If you are looking for more education I recommend Anthony Chara of www.successclasses.com.  His workshops are filled with a ton of useful and usable content.

I'm also from Colorado and I will second what @Account Closed said.  They are in huge demand.  I was looking at it myself.  I have heard the average age of appraisers is around 60-65.  So the demand for them is only going to go up.  Around here I believe commercial appraisers are easily making $100k+ per year.

When you are doing your research and prior to actually taking any classes you should talk to some appraisers in your area.  There is a huge liability on the appraiser for the work of any apprentice and it has made them very stingy about it.  If you find one that would take you on you should consider pursuing it.  If everyone is telling you they won;t take an apprentice you may go through a year of schooling without every being able to do the apprenticeship and get your license.

Pro: initial rate may be lower and thus your payment may be lower.  Great for using when your plan is to either do a cash-out refinance prior to the rate adjustment or to sell the property before the adjustment.

Con: if you don't refinance your rate can go up.  When you refinance you may have to refinance into a higher rate anyway.

The good thing about your situation is that it has 8 years before the adjustment.  That's a long time.  I've personally gotten 5/1, 3/1, and 1/1 ARMs before.  As long as you are prepared for a possible adjustment you will be fine.

Congratulations!  Sounds like things are going well for you!

@Michael Morris check with a real estate agent and/or property manager in your area but you should be able to rent it out without any issues.  The benefit of having commercial zoning is that should you attract a tenant that wants to open up a small office in your building that would be fine.  We have a section in my town that has some older homes with first floors rented out to insurance agents, barber shops, etc. and then the upstairs are rented to individuals to live in.

My personal opinion is that as long as you are legally allowed to continue renting it out to live in, why change it.  The commercial zoning gives you a ton more options for tenants now and in the future.

@Devin Mills the benefit of the 30 year mortgage is the lower monthly payment which increases your cash flow. 4.25% is still a historically low interest rate and not nearly as bad as it could be.  

The decision is going to be largely based on your goals.  If you are planning on buying a property and paying it off over a few years and then buying another, the 3.5% is going to save you interest while you pay it off.  On the other hand, if your plan is to utilize leverage to build wealth then the lower payment is going to help you out.  Having a lower monthly payment is going to free up more cash for the next deal as well as making it easier to qualify for a loan for the next deal because your debt-to-income is lower.

Thanks @Bill S.  I've got some homework to do.

@Bill S. thanks for the input.  To do the re-zoning I was planning on a lengthy closing period and that being one of the conditions.  Have you heard of people doing this successfully?  I know one person that took 80 acres from Ag to Industrial,  I thought going from commercial to light industrial might be easier especially given the surrounding businesses.

One of the things I am worried about for utilities is that the municipality just shut down a large housing project because they don't have the water to allocate to it.  So that alone could kill the whole deal.

There is some access to the property from the South but not from the North.  Any idea on the marketability of such a place?