All Forum Posts by: Joshua Brown

I find it hard to believe there is ANY property with a 4.5% cap rate in Wichita.  I would contacts a local appraiser and ask what the average CAPs are for each type of property you are looking at in the specific locals that they are in.

Do not order an appraisal yourself.  A bank will not accept it an will need to order their own.  As someone who has financed deals like this, a bank will need at least 2 valuation methods.  The generally are sales comps and income.

@Matthew Forbes

As someone who has brokered many hard money deals, I have learned that each deal is different.  If you are planning on using hard money you have to have an "out" when that note matures.  Whether that is to flip a property or refinance it. 

That is why I, almost, never recommend hard money for buy and hold deals, unless there is significant rehab/construction that is needed that will increase the value of the property because more times than not there is not enough equity in the real estate to pay off the hard money loan. Especially when conventional, commercial, lenders are reducing the advance rates on SFR anywhere from 60 - 70% LTV.

You may need to ask your lender, but I would read this as a 10 year term note with a 20 year amortization with a rate adjustment after year 5.  So your rate is fixed for 4.75% for the first 5 years and then adjusts to the 5yr treasury +1.33% - which would then be fixed for the second 5 years.

The 10 year term means that your loan will balloon in 10 years - you will need to pay it off or refinance it at that time.

the 20 year amortizations means that your payments are based on paying your loan off in full in 20 years.

- that is breaking it down for ya,

Let me know if you need anything else

Just to reiterate what has been said here already and add my $.02.  Fed rates effect do not directly effect mortgage rates.  Mortgage rates are tied more closely to the 10 year treasury and as interest rates increase, usually the treasury yields increase as well.  But that is not happening (yet).  This market is very difficult to predict so to say mortgage rates are going to go up because the fed raised the fed rate is inaccurate.  If you want a sign on what mortgage rates are going to do, watch the 10 year treasury rates

Banks do lend to LLC's, but you would need to get a commercial loan and not a conventional mortgage. Freddie and Fannie general do not allow loans to LLC's

filing fee in Illinois is $500 for an LLC

Michael Puwal I read your profile and am not sure why you can't get financing for additional RE investments. It appears you are experienced and know what you are looking for and a 10 unit property should cash flow. The Nashville area is a great area it invest with the low property tax and no state income tax. Let me know if you need any help down there. I could refer you to some lenders.

Again. You can use equity in other properties as your 20% equity injection. If that is the case then yes the bank will put liens those properties that they are taking as collateral.

It all depends on what you are trying to accomplish. Are you aching out? Are you purchasing a new property and using equity in other properties for your "down payment?" I would find I hate to believe that you would need to pledge all of your properties to purchase another property. Could you elaborate a little more on what you are doing?