All Forum Posts by: Ken Jernigan

Many lenders won't consider rentals with individual leases, as they're seen as rooming houses. You might be limited to non-banks who fund Airbnb's.

It's too small to make any money. Is this in a rural area? If so, rents will be lower than average. Any deferred maintenance, leaky roof, dirty units, auction needed? What's occupancy? Best case this could make you about $800-$1000/mo before debt and tax. If it's stabilized, you'd have to put in at least 20 hours a week as manager, more if it isn't plus spend more money on upgrades and marketing.

I'd look for a bigger property with value-add potential.

@Odie Ayaga What was the company you dealt with for business lines of credit? I'm interested in true business lines, not credit cards. Thanks.

What could possibly go wrong? 1) Value of property declines; 2) Cash flow of property declines; 3) Your personal credit deteriorates; 4) Interest rates go up; 5) Current lender gets bought out; 6) Current lender has portfolio restrictions; 7) Your buddy the loan officer is no longer there.  All good reasons to start early and shop the refi.

Get your lender package together soon so you don't waste time looking for tax returns, bank statements, PFS, etc.

OZ funds self certify through IRS declaration. Lots of activity in this space, but many are holding off until final IRS regs are issued. Biggest hurdles for investors is "substantial" improvement requirement. Although not spelled out, most think this means investing an amount in improvements equal to the tax basis of the building--not including land. Practically this means only major renovation or ground-up projects will qualify, but should provide some good opportunities for cost-seg salesmen.  Also up in the air is exact timing of rolled over cap gains, with big funds lobbying for 360 days versus the proposed 180; lengthening the construction period beyond the suggested 30 months; and allowing interim profits to be rolled forward.

All the same, looks like OZs will be a good alternative to 1031s. I believe there will be a lot of activity here, but mostly project driven rather than fund driven.

Hey Brandon--welcome to BP. I'm in eastern NC with an investor group that focuses on underperforming self storage and mobile home parks. Would love to get up with you and talk things over.

Looks like @Joe Prillaman is organizing one for the following Tuesday night at Wilmington Brewing. Should we just consolidate? I'm happy to do either or both,

Better lean hard on the seller financing. It's a challenge to finance parks w/septic & wells. Might want to check out ability & cost of sewer hook up.

This is kind of a screwy request--they're asking you to document a negative, that is no deed of trust is filed on the properties. Normally, you'd submit a signed schedule of real estate owned disclosing all debt on the properties, and the lender would conduct a lien search pre-closing.

Got it.